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As local recovery from Hurricanes Harvey, Irma and Maria faces an “extremely long road” to recovery, private lenders are stepping in to fulfill certain community development requirements, preparing to fill what we at CNN Money believe could be the void left by the federal government.
According to a Pew Charitable Trust report, 45% of local public financial assistance has been distributed to private lenders, who conduct community and economic development programs and assist in disaster recovery, much of which is done through low- or no-interest community development loans and grants. That program depends on federal disaster recovery aid, but Bloomberg reports that private mortgage insurers, development firms and other private entities have stepped in to the help during times of high need, even if the federal aid did not come through as expected:
“When the federal government has not been able to come through in a crisis, these lenders are stepping up and working with communities to make sure those resources are being put to good use. It’s saving money not only for them but also for communities,” said John Walsh, a vice president at the Pew Charitable Trust. “I think they’re just doing what they have to do, and they’re doing it in a very responsible way.”
As these private lenders seize the reins in the aftermath of Hurricane Sandy in 2012, the need for public, non-profit and private infrastructure assistance is hardly diminishing. They’re a tremendous benefit to the public when disasters strike, which is why members of the House and Senate could so readily approve new legislation.
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