Federal: AFC Letter of Support for Advancing the Mentor-Protege Program for Small Financial Instituions Act

June 10, 2025
The Honorable French Hill
Chairman
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515

The Honorable Maxine Waters
Ranking Member
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515

Re: AFC Support of Advancing the Mentor-Protégé Program for Small Financial Institutions Act

Dear Chairman Hill, Ranking Member Waters, and Members of the Committee,

On behalf of the American Fintech Council (AFC),  I write to express our support for H.R. 3709, the Advancing the Mentor-Protégé Program for Small Financial Institutions Act (the Act). This legislation reflects a smart, scalable approach to strengthening community financial institutions and promoting innovation, competition, and resilience in the financial services ecosystem.

AFC’s mission is to promote an innovative, transparent, inclusive, and customer-centric financial system by supporting the responsible growth of lending, fostering innovation in financial technology (Fintech), and encouraging sound public policy. AFC members are at the forefront of fostering competition in consumer finance and pioneering ways to better serve underserved consumer segments and geographies, particularly low- and moderate-income (LMI) consumers. Our members are also improving access to financial services and increasing overall competition in the financial services industry by supporting the responsible growth of lending and lowering the cost of financial transactions, allowing them to help meet demand for high-quality, affordable financial products.

AFC recognizes and supports the crucial role community banks and Minority Depository Institutions (MDIs) play in providing responsible lending services. and we support legislation that facilitates MDIs’ growth. The Act would codify the Financial Agent Mentor-Protégé Program at the U.S. Department of the Treasury, pairing small financial institutions with larger banks and credit unions to provide resources, training, and technical assistance that help them better serve their communities and qualify as Financial Agents to Treasury. By formalizing and strengthening this initiative, the Act supports the operational capacity, regulatory compliance, and long-term sustainability of smaller institutions. This Act aligns with the Committee’s initiative of revitalizing community banking in the United States, and reflects a longstanding bipartisan commitment to strengthening small depository institutions.

Additionally, as noted by the U.S. Government Accountability Office (GAO) in its 2024 report “many small CDFIs and MDIs reported they lack the technology needed to provide online services or to underwrite loans, manage operations, and conduct outreach more efficiently” and that, in turn, this “constrains their ability to serve underserved communities”   . AFC concurs with the GAO’s recommendation for the Department of the Treasury to develop training and other materials to improve technology capacity, and believe that the Act is part of the toolkit needed to remedy this issue.  

Small institutions are vital to economic inclusion and local lending yet often face outsized challenges in areas such as compliance, vendor management, and technology modernization. A well-designed mentor-protégé framework could provide tailored technical assistance and knowledge-sharing that helps these institutions thrive without sacrificing independence or core community missions. These are areas where collaboration can lead to stronger consumer protection and a healthier financial ecosystem.

We commend Rep. Beatty for her leadership in introducing the Act, and urge all members of the Committee to support its passage. AFC stands ready to assist in the development and implementation of any future program that stems from this important legislation.

Sincerely,

Ian P. Moloney

SVP, Head of Policy and Regulatory Affairs

American Fintech Council

CC:

The Honorable Joyce Beatty, Committee on Financial Services, U.S. House of Representatives

[1] AFC’s membership spans technology platforms, non-bank lenders, banks, payments providers, loan servicers, credit bureaus, and personal financial management companies.
[2] A prior version of the Act passed the Committee on a bipartisan basis in 2019.
[3}U.S. Government Accountability Office, Economic Development: Additional Training Could Help Small Lenders Implement Technology, GAO-24-106226, (Mar. 28, 2024), available at https://www.gao.gov/products/gao-24-106226.

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