Secretary Statements & Remarks

Remarks by Secretary of the Treasury Janet L. Yellen at the 2023 Freedman's Bank Forum

As Prepared for Delivery

John, thank you for that kind introduction. Your advocacy to ensure that the Freedman’s Bank legacy was not forgotten is on full display today and has inspired so many of our efforts. And good afternoon to all of you. My thanks for joining for the Biden Administration’s third Freedman’s Bank Forum. And thank you in particular to the HBCU students who are here with us today: It’s crucial that your voices help inform the conversations we’re having.

We’ve accomplished a lot since the start of this Administration, and the Treasury Department is proud to have played a major role. Today is an opportunity to reflect on our efforts thus far so that we can continue driving progress going forward.

All of us here know that the U.S. economy has not historically worked well for Black, Latino, Native, and many Asian American and Pacific Islander communities. And we also share a forward-looking vision: of an economy that unlocks the economic potential of people, communities, and businesses that have been left behind. We share this vision because it is fair, and also because it is good economics, crucial to our country’s economic strength and resilience. Over the past two and a half years, this vision has led us to help drive the most equitable recovery on record. Now, the same conviction underlies our work to build the most inclusive economy we can for the long term. In my remarks today, I’ll highlight some of the key tools we’ve deployed and the impacts our work is having.

When President Biden took office, we faced the twin health and economic shocks of COVID-19. The President worked with Congress to pass the American Rescue Plan, which shaped our economic recovery and laid the groundwork for future growth. From the start, and especially through the American Rescue Plan, the Biden-Harris Administration and Treasury Department focused on the needs of the most vulnerable Americans. This included people of color, female-headed households, low-income families, and rural communities. We understood that effectively delivering services to these populations meant that we could not rely on a one-size-fits all approach. Instead, we prioritized the use of community-informed approaches, partnerships with trusted state and local partners, and data-driven program design. And through these efforts we helped drive a historically equitable recovery. 

Our work on housing is one example. Governments receiving funds from the American Rescue Plan’s Homeowner Assistance Fund were required to target assistance to below-median-income and socially-disadvantaged homeowners. These efforts worked. Thirty-five percent of homeowners receiving assistance self-identified as Black and 23 percent self-identified as Hispanic or Latino. As a result of these and other efforts, foreclosure rates remained the lowest they have been in nearly two decades, benefiting far more people than just direct recipients of funds.

The Child Tax Credit is another example. In response to the threat COVID-19 posed to child poverty, we implemented the expanded Child Tax Credit, allowing tens of millions of families to receive hundreds of dollars per child in monthly support. The program brought over 700,000 Black children out of poverty in 2021 and cut overall child poverty almost in half. Devastatingly, the expiration of the expanded credit has since erased these gains, underscoring how much work we still have ahead.

It is indisputable, however, that our efforts helped to drive a recovery that was both historically fast and historically equitable. As we show in a Treasury report released this week, the Black unemployment rate has fallen to historic lows. So has the gap between the Black and white unemployment rates. The Latino unemployment rate, which spiked more than that of any other ethnic group during the pandemic, has since fallen to pre-pandemic levels. These results were not inevitable. We made choices that helped combat this country’s long history of racial inequality and prevented the pandemic from further entrenching it.

As I’ve said, these choices were founded on a belief that supporting vulnerable populations means better outcomes for all of us. And this same conviction drives our long-term actions. President Biden’s Investing in America agenda is rooted in what I call modern supply-side economics: an economic strategy to expand our economy’s long-term productive capacity while reducing inequality and environmental damage. We’re broadening economic opportunity, and, through that, fueling growth.

I’ll focus today specifically on our efforts to help small and underserved businesses, centered on two things small businesses need: capital and new market opportunities.

I’ll start with capital. Through the Emergency Capital Investment Program, we’ve invested more than $8.5 billion in community financial institutions, including $1.4 billion in Black-owned and Black-majority shareholder depository institutions. We are just receiving the first round of reporting. It shows that in about six months of lending in the second half of 2022, one third of total originations were “deep impact” loans, made to the hardest-to-serve borrowers. And this is just the start. Over the next decade, we expect that ECIP will result in nearly $80 billion in increased lending in Black communities and nearly $58 billion in Latino communities.

Meanwhile, the State Small Business Credit Initiative is providing nearly $10 billion to increase access to capital and promote entrepreneurship, including $2.5 billion in funding and incentives to support underserved businesses and jurisdictions that successfully reach those businesses. I’m pleased we just announced that SSBCI will provide new funding for technical assistance grants to help build out the pipeline of diverse entrepreneurs in fields key for the Investing in America agenda. And, more broadly, we’re seeing significant growth. The number of Black active business owners increased by 10 percent from the start of 2021 to August 2023. The number of Hispanic active business owners increased by 26 percent. And more new business applications were filed in 2021 and 2022 than ever before.  

To open doors to new market opportunities, we’ve started by walking the walk ourselves. Over the past two years, the Treasury Department has increased the dollar amount of contracts awarded to Black-owned businesses by 60 percent. In fiscal year 2022, we awarded more than $123 million to Latino-owned contractors, an increase of over 20 percent from the year before. The IRS has now committed to spend 19 percent of its overall procurement on small and disadvantaged businesses in 2024. And just this morning, several additional corporate leaders agreed to match the government’s commitment to spend 15 percent of their procurement dollars with small and underserved businesses by 2025. More firms doing so could generate hundreds of billions of dollars in new contracts for small and underserved businesses.

More than simply contract awards, we’re seeing deeper efforts to build out supply chains for critical sectors such as renewable energy by working with diverse entrepreneurs. Also this morning, corporate leaders highlighted technical assistance programs they’re pursuing to foster the knowledge and capacity necessary for diverse entrepreneurs to compete for larger contracts. Like many of our efforts, this will benefit far more than these entrepreneurs. Companies across the United States face shortages of skilled workers and suppliers, so incorporating diverse businesses is also crucial to our efforts to build resilient supply chains.

These efforts align with our broader push to drive investments in low-income communities, such as through boosting the Inflation Reduction Act’s clean energy investment tax credit through the Low-Income Communities Bonus Credit Program. This boost helps extend the IRA’s benefits to people and places that have been economically left behind. We are pleased to have opened the application process just last week.

These and many other changes are having and will continue to have real impacts. We’re building on our equitable recovery and creating an inclusive economy for the long term. We’re working toward more economically robust communities, with families who can buy homes, find jobs, and support their children’s health and education.

I know those in this room—from state and local government officials, to business executives, to non-profit leaders—are committed to this shared vision. We’ve learned and continue learning as we go. And I trust we will all continue to expand and deepen our efforts going forward. An economy that works for communities of color is an economy that works for all of us—fueling our economic strength and ushering in a better future. Thank you again to all of you for being here today and for being part of this crucially important work.