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H 1348

An Act to establish the Massachusetts loan loss guarantee program for community development financial institutions

194th Legislature (2025-2026) Introduced by Jamie Eldridge and 2 co-sponsors

Creates a funded program that guarantees up to 80% of loan losses to CDFIs and similar lenders to expand affordable credit for underserved Massachusetts micro and small businesses.

Accompanied a study order, see H5213
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Bill Summary · H 1348

Summary: H.1348 — An Act to establish the Massachusetts loan loss guarantee program for community development financial institutions

Purpose and scope

  • Establishes the Massachusetts loan loss guarantee program for community development financial institutions (CDFIs) and other nonprofit or non-traditional lenders.
  • Administered within the Massachusetts Development Finance Agency (MassDevelopment) in partnership with the Executive Office of Economic Development.
  • Aims to support lending to microbusinesses and small businesses serving low-income communities, Gateway Cities, minority-owned, worker-owned, women-owned, and socially/economically disadvantaged enterprises.
  • Includes an advisory board of diverse stakeholders to inform program design and operation.

Key provisions

Guaranteed losses and risk-sharing

  • The program may guarantee up to 80% of eligible loan losses incurred by participating CDFIs and other nonprofit/non-traditional lenders.
  • Aims to improve risk management and lending practices through technical assistance and training for participating institutions.
  • Liabilities of the program are limited to funds held by the agency and do not constitute a debt or pledge of the Commonwealth’s credit.

Eligibility and targeting

  • Prioritizes loans that serve:
    • Microbusinesses and small businesses in low-income communities
    • Gateway Cities
    • Minority-owned, worker-owned, women-owned, and socially/economically disadvantaged enterprises
  • The agency will establish loan eligibility criteria, guarantee terms, and risk-sharing arrangements.

Administration and reporting

  • The agency, with the EOD, will administer the program and monitor loan performance.
  • Annual reports to the General Court detailing impact, financial performance, and recommended improvements, due within 90 days after the close of each fiscal year.

Advisory board and governance

  • An advisory board comprising:
    • Leaders from multiple CDFIs, nonprofit/non-traditional lenders, banks (state and national), credit unions, and diverse advocacy organizations (e.g., Amplify LatinX, The Boston Foundation, BECMA, MACDC, CEE, and others).
    • The Secretary of Economic Development serves as chair; the MassDevelopment executive director serves as vice chair.
    • May appoint additional ex officio members; designees permitted for board members.

Funding and sources

  • Program funded through:
    • State appropriations and agency fees from guarantee services
    • Private contributions, philanthropic funding, and federal opportunities
    • Subventions, grants, loans, and other contributions
    • Income from agency operations and related funds (e.g., Transformative Development Fund, Growth Capital Division)

Who is affected

  • CDFIs and other nonprofit/non-traditional lenders participating in the program.
  • Microbusinesses and small businesses in target communities (low-income, Gateway Cities, minority/women/worker-owned, and disadvantaged enterprises).
  • Community development ecosystem via advisory board and technical assistance.

Procedural notes and timeline

  • Introduced: February 27, 2025.
  • Referred to: Committee on Financial Services.
  • Hearing: Rescheduled to November 18, 2025 (A-2 and virtual); multiple updates noted.
  • Related actions: House HD 3217 (replaces) and sponsors Bud L. Williams (primary) and Jacob R. Oliveira (cosponsor).
  • Related bill activity and status may include Senate concurrence in various updates.

Potential impact

  • Could expand affordable credit access for underserved communities by sharing risk with lenders.
  • May strengthen lenders’ capacity through targeted technical assistance.
  • Fiscal impact largely dependent on future appropriations, fees, and private/federal funding; liabilities are limited to program funds, not the Commonwealth’s debt.

For readers seeking the essence: H.1348 creates a funded, credit-enhancing program to bolster lending to underserved Massachusetts communities via CDFIs and similar lenders, backed by a broad advisory board and requiring annual reporting on outcomes.

Compiled from official sources — confirm details with the bill’s official record.

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