Equity Action Plan

One Year 

Progress Report

Department of the Treasury 

April 2022
Equity Action Plan

One Year 

Progress Report
Equity Action Plan One Year Progress Report 1

EXECUTIVE SUMMARY

The Department of the Treasury’s mission is to maintain a strong economy and create economic and job 

opportunities by promoting the conditions that enable economic growth and stability at home and abroad, 

strengthen national security by combating threats and protecting the integrity of the financial system, and manage 

the U.S. Government’s finances and resources effectively. 

For far too long, the economy has not worked as well as it should for many people of color. We are still living with 

the impacts and legacy of actions and policies that prevented Black, Hispanic, Asian American Pacific Islander 

(AAPI), and Native communities from building intergenerational financial security and wealth in the same way 

that other families have done. Treasury also understands that other underserved communities, including many 

rural areas and those affected by climate change face major barriers to reaching their full economic potential. 

Furthermore, the COVID-19 pandemic exposed and amplified long-standing disparities in health and economic 

outcomes, causing the pandemic to disproportionately affect people of color and members of underserved 

communities. 

Treasury is working to ensure that families, businesses, and neighborhoods that have been historically excluded 

from economic opportunities or experienced persistent poverty are fully included in the nation’s economic 

recovery and future growth. Consistent with Executive Order (EO) 13985, Treasury is building the infrastructure 

necessary to identify barriers to racial equity and continuously reexamine the Department’s efforts to meaningfully 

reduce access barriers and strengthen delivery of programs and services to better reach historically underserved 

communities. 

This report includes:

•	 Year One Accomplishments

•	 Equity Action Plans: Updates and a Look Ahead

1. Fostering an equitable recovery that helps ensure all Americans rebound from the economic 

consequences of a global pandemic

2. Capitalizing community finance partners to ensure flow of mission-driven capital to families, 

businesses, and neighborhoods that need it most

3. Ensuring the tax system promotes a fair economy and all Americans receive the benefits for which 

they are eligible 

4. Reforming government debt collection practices to reduce burdens

5. Expanding opportunity through procurement and contracting

•	 Resources Dedicated to Civil Rights

•	 Structure and Accountability

•	 A Look Ahead

Summary of Year One Accomplishments

•	 Appointment of Counselor for Racial Equity: In October of 2021, the Secretary appointed the 

Department’s first-ever Counselor for Racial Equity. This Counselor will coordinate all offices and 

workstreams intended to advance equity and advise the Treasury Department on all racial equity 

policy issues and programs. 
2 Equity Action Plan One Year Progress Report

•	 Disbursement of Economic Impact Payments/Advance Child Tax Credit Payment: Since the 

passage of the American Rescue Plan (ARP), the Department worked diligently to distribute more 

than 170 million economic impact payments (EIPs) totaling more than $400 billion to help Americans 

weather the financial hardship caused by the pandemic and advancing over $92 billion in Child Tax 

Credit (CTC) payments to the families of more than 60 million children. 

•	 Emergency Capital Investment Program: In December 2021, the Emergency Capital Investment 

Program (ECIP) announced $8.7 billion in investments in Community Development Financial 

Institutions (CDFIs) and Minority Depository Institutions (MDIs) in order to increase lending to 

small and minority-owned businesses, and low- and moderate-income consumers in underserved 

communities, including rural areas.

•	 CDFI Rapid Response Program: The CDFI Rapid Response Program provided $1.25 billion to 

Community Development Financial Institutions (CDFIs) to help their communities respond to 

the economic hardships created by the COVID-19 pandemic – offering a historic investment in 

institutions that reach communities that have traditionally been underserved by the financial sector.

•	 State Small Business Credit Initiative: The State Small Business Credit Initiative (SSBCI), a $10 

billion program to enhance access to credit and other forms of investment for small businesses 

includes a $2.5 billion allocation for supporting businesses owned by socially and economically 

disadvantaged individuals, including those in communities of color who have historically struggled 

to access the capital they need to support their businesses. 

•	 Tribal Engagement: Treasury has held numerous Tribal Consultations to ensure that relief funds 

reach Tribes quickly, and that each Tribe has the flexibility to use relief funds to respond to the 

COVID-19 pandemic as an extension of respect for Tribal sovereignty. Across programs, Treasury 

engaged over 8,600 individuals in 65 hours of consultations, information sessions, and other 

meetings. 

•	 Freedman’s Bank Forum: Held in December 2021, Treasury’s Freedman’s Bank Forum was 

reestablished as an annual event to elevate and commemorate the role of community based 

financial institutions, showcase Treasury’s progress on its commitment to racial equity, and invite 

dialogue on timely topics related to building wealth among communities of color.

•	 Supporting Women and Minority-Owned Businesses and Minority Depositary Institutions 

(MDIs): In Fiscal Year 2021, Treasury awarded $738 million to minority-owned businesses (without 

regard to size), which is 8 percent of total contract dollars, substantially above the goal of 5 percent, 

and $635 million to women-owned businesses (without regard to size), which is 7 percent of total 

contract dollars and substantially above benchmarks. Separately, Treasury also engaged a minorityowned financial institution as a designated financial agent and two MDIs as contractors to other 

financial agents.

•	 Supporting Women and Minority-Owned Businesses: In Fiscal Year 2021, awarded $738 million 

to minority-owned businesses (without regard to size), which is 8 percent of total contract dollars, 

substantially above the goal of 5 percent, and $635 million to women-owned businesses (without 

regard to size), which is 7 percent of total contract dollars and substantially above benchmarks. 

•	 Departmental Strategic Management Processes: Treasury has successfully incorporated 

equity discussions into the budget formulation cycle and into strategic quarterly organizational 

performance reviews. The Budget and Strategic Planning Offices will continue to assess these areas 

as part of the annual performance and budget cycle.
Equity Action Plan One Year Progress Report 3

Equity Action Plans: Updates and a Look Ahead

1. Fostering an equitable recovery that helps ensure all Americans rebound from the economic 

consequences of a global pandemic

The ARP is a $1.9 trillion package of which more than $1 trillion is managed by Treasury to jumpstart the nation’s 

economic recovery. The pandemic exacerbated longstanding racial health and economic disparities. Black, 

Hispanic, and Native Americans were more likely to be infected, hospitalized, or die from COVID-19 than their 

white counterparts.1 Communities of color also carried a double burden in this pandemic: both more likely to 

work in essential, frontline roles with a higher risk of exposure and more likely to lose those jobs as the pandemic 

caused the economy to contract. 2 3 History has shown that downturns often hit communities of color hardest 

while recovery often comes much slower than for the rest of the population. As an example, in the aftermath of 

the Great Recession, while median white household wealth began to recover from 2010 to 2013, Black household 

wealth fell another 23 percent during this period.4 These disparities and the harms that flow from them matter for 

all Americans because the exclusion of communities of color from the ladder of economic opportunity holds back 

economic growth for the entire country. According to a report from McKinsey & Company, taking meaningful steps 

to close the racial wealth gap could increase the U.S. Gross Domestic Product by 4 to 6 percent by 2028.5 

Emergency Rental Assistance

A. Potential Barriers to Equity

Leading into the pandemic, Black and Hispanic households experienced a disproportionate risk of eviction. Over 

half of Black (54 percent) and Hispanic (52 percent) renter households were rent burdened (paying more than 

30 percent of their income toward rent) in 2019, as compared with 42 percent for Asian and White households.6 

As state and federal eviction moratoria lifted throughout the country by September of 2021, the first-ever 

national Emergency Rental Assistance program became a lifeline for millions of tenants across the country. 

Implementation strategy became essential to ensuring the program reached the historically underserved and most 

vulnerable households.

B. Action in Progress

In 2021, Treasury Department guidance allowed for flexibility in the application and approval process for rental 

assistance, which enabled more than $25 billion to be distributed or obligated across 3.8 million payments to 

renters and landlords, with the over 80 percent of funds going to the lowest-income Black and Hispanic/Latino 

households. Treasury encouraged grantees to partner with community-based organizations, tenant organizations, 

promotors,7 or trusted community leaders to increase awareness and provide tenants with application assistance, 

among other interventions. Treasury also encouraged, and most grantees have incorporated, Spanish-language 

translation services into their application processes, with some grantees offering support in multiple additional 

1 https://www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/hospitalization-death-by-race-ethnicity.html

2 https://www.urban.org/sites/default/files/publication/103278/how-risk-of-exposure-to-the-coronavirus-at-work-varies.pdf

3 https://sgp.fas.org/crs/misc/R46554.pdf

4 https://www.brookings.edu/blog/up-front/2020/12/08/the-black-white-wealth-gap-left-black-households-more-vulnerable/

5 https://www.mckinsey.com/industries/public-and-social-sector/our-insights/the-economic-impact-of-closing-the-racialwealth-gap

6 JCHS 2022, Eviction Lab

7 A promotora is a lay Hispanic/Latino community member who receives specialized training to provide basic health 

education in the community without being a professional health care worker.
4 Equity Action Plan One Year Progress Report

languages. Working with the U.S. Digital Service, Treasury has conducted outreach to incorporate the perspective 

of diverse recipients in program guidance to ensure that it incorporates strategies that advance equity. Treasury 

is continuing this work of understanding the experience of tenants, landlords, grantees, and other stakeholders to 

identify remaining barriers to access for underserved communities. 

C. Looking Ahead

Treasury is actively seeking feedback from rental assistance beneficiaries through meetings with advocacy groups, 

associations, and other stakeholders. USDS and Treasury are looking specifically at the issues of application 

usability and access for ERA, as well as the integration of housing support services. Insights from these discussions 

will inform Treasury’s implementation of the program, including the issuance of additional guidance and FAQs and 

the publication of “promising practices” on Treasury’s website.

This work has also highlighted the importance of strategies to support long-term eviction prevention programs, 

including right-to-counsel and eviction-diversion programs that reform the harmful eviction system. Treasury will 

continue to encourage grantees to use housing stability funds for these purposes and to work toward long-term 

adoption of interventions to mitigate housing instability. However, given the limits on ERA spending, additional 

funding sources will need to be identified to sustain the interventions and ensure housing stability.

D. Assessing Impact

In 2021, Treasury issued guidance regarding monthly and quarterly reporting that included the number of 

households served, spending rates, demographics, and housing stability spending. Given the first-time nature 

of the ERA program and the rapidly evolving public health crisis, Treasury requested monthly updates from 

grantees to help identify trends and issues as early as possible. In addition, the Legal Services Corporation and 

the Eviction Lab at Princeton University began providing partial data on eviction filings in many of the jurisdictions 

administering ERA. Collectively, these data were critical to informing early course corrections and helping the 

Administration understand where to apply more attention and how best to support grantees. Over time, the data 

revealed a successful effort to rapidly disburse resources to address the eviction and housing crisis. 

Homeowner Assistance Fund

A. Potential Barriers to Equity

Prior to the pandemic, increasing housing costs and stagnant wages were already making it difficult for families to 

keep up with monthly bills, often leaving them a paycheck away from crisis.8 The Homeownership Assistance Fund 

(HAF) provides up to $9.961 billion for Treasury to make payments to states, U.S. territories, Indian Tribes or Tribally 

Designated Housing Entities (TDHEs), and the Department of Hawaiian Home Lands (DHHL) to mitigate financial 

hardships associated with the coronavirus pandemic, including for the purposes of preventing homeowner 

mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and displacements 

of homeowners experiencing financial hardship after January 21, 2020, through qualified expenses related to 

mortgages and housing. HAF participants must (1) use at least 60 percent of funds for homeowners with income at 

or below 100 percent of area median income or median U.S. income, and (2) prioritize the remainder for “socially 

disadvantaged individuals” whose ability to purchase or own a home has been impaired due to diminished access 

to credit on reasonable terms as compared to others in comparable economic circumstances. 

8 Kyle J. Casewell and Stephen Zuckerman, Food Insecurity, Housing Hardship, and Medical Care Utilization, Urban 

Institute (June 2018), available at https://www.urban.org/sites/default/ files/publication/98701/2001896_foodinsecurity_ 

housinghardship_medicalcareutilization_ finalized.pdf.
Equity Action Plan One Year Progress Report 5

B. Action in Progress

In 2021, Treasury released 10 percent of each participant’s HAF allocation to implement pilot programs and worked 

with state and Tribal participants on development of their HAF implementation plans. Treasury solicited input from 

a wide set of stakeholders to inform its approach to HAF, including to understand the impact on racial equity and on 

underserved communities. With this input in mind, Treasury has required participants to structure their programs 

to effectively target eligible homeowners based on data-driven assessments of homeowner needs. Participants 

must also provide data about financial hardships of target homeowners and socially disadvantaged individuals, 

including disaggregated characteristics of the targeted population such as income ranges, racial and ethnic 

demographics, and/or geographic areas (including rural communities), as appropriate for the relevant jurisdiction. 

C. Looking Ahead

As an increasing number of states have launched their full HAF programs. The expanded deployment of HAF 

program resources across the country is timely considering the increased awareness concerning foreclosures 

as government issued moratoria has expired As these programs evolve, Treasury will continue to monitor 

developments in the implementation of HAF programs, elevate innovative practices that support equity, and 

proactively offer technical assistance in program stand-up and the development of innovative strategies to 

effectively support vulnerable homeowners. Lessons learned from other emergency housing programs to support 

equity and accessibility will support the development of these resources, including promising practices related to 

outreach to socially disadvantaged communities and reducing program barriers. 

D. Assessing Impact

Since Treasury has encouraged grantees to offer support through HAF as a suite of potential solutions to 

homeowners, measurement of program outcomes must consider program outputs and broader economic 

indicators of program outcomes within each geography. HAF participants are required to submit quarterly reports 

and a more detailed annual report to Treasury that include financial data, targeting data and measures of program 

impact. Local foreclosure rates and other economic indicators will also continue to inform how HAF programs be 

stemming foreclosures, identify foreclosure hotspots where more resources may be needed, and track outcomes 

for the longer term.

State and Local Fiscal Recovery Funds

A. Potential Barriers to Equity

During the pandemic, state, local, and Tribal governments faced challenges, as they worked to meet the public 

health and economic needs of their communities while also confronting the need to rebuild their capacity. While 

the pandemic affected communities across the country, it disproportionately impacted certain demographic 

groups and regions, exacerbating health disparities along racial, ethnic, and socioeconomic lines.9 To support the 

continued response to and recovery from the pandemic, the ARP delivered $350 billion through the Coronavirus 

State and Local Fiscal Recovery Funds (SLFRF) to states, territories, metropolitan cities, counties, non-entitlement 

units of local government, and Tribal governments. Given the wide variety of circumstances facing recipient 

governments, the statute and Treasury’s implementing regulation and guidance offer considerable flexibility to 

enable jurisdictions to meet their unique needs. At the same time, Treasury has worked to balance this flexibility 

with the risk that the underserved populations could be overlooked as jurisdictions move rapidly to use funds to 

meet local needs. 

9 Centers for Disease Control and Prevention, COVID Data Tracker, https://covid.cdc.gov/covid-data-tracker/#health-equity-data

(last visited February 14, 2021).
6 Equity Action Plan One Year Progress Report

B. Action in Progress

The final rule for the SLFRF program has strong equity provisions, including allowing broader funding uses 

specifically for individuals and communities that were disproportionately impacted by the public health and 

negative economic impacts of the pandemic to address preexisting disparities that amplified the pandemic’s 

impact on underserved communities. Treasury has identified a wide range of programs, services, and capital 

expenditures that are eligible uses of funds to serve disproportionately impacted households and communities, 

including eligible uses that address the root causes of preexisting inequities. For example, housing vouchers 

and education services to address academic, social, emotional, and mental health needs are eligible uses when 

provided to disproportionately impacted households and communities. In addition, recipient governments may 

identify additional disproportionate impacts of the pandemic and design appropriate responses to address that 

harm. The Department also hosted a webinar for recipient governments focused on equity in the SLFRF program, 

addressing topics such as defining equity, assessing disparate impacts in communities, and considering ways to 

address equity gaps. 

C. Looking Ahead 

To aid recipients’ planning on how to use funds, Treasury will highlight examples of projects focused on eligible 

uses and projects focused on equity and will conduct recipient outreach to share these example projects. State, 

local, and Tribal government leaders and stakeholders are intensely focused on implementing their SLFRF 

programs and how they can use these funds to advance equitable outcomes in their communities – and Treasury 

has and will continue to use all available tools to support these governments’ equitable uses of SLFRF funds.

D. Assessing Impact

The Compliance and Reporting Guidance for the program also includes reporting parameters related to 

equity. In the Project and Expenditure reports, recipients will provide information about the impacted and 

disproportionately impacted communities they are serving with projects under the public health and negative 

economic impact eligible use category. In the Recovery Plans (required of the largest recipients, who account for 

approximately three-quarters of the total funds), recipients reported on how they plan to incorporate equity and 

community engagement in their spending plans. Treasury will collect Project and Expenditure reports from all 

recipients in April 2022. In addition, the largest recipients will provide additional information in the next Recovery 

Plans, due in July 2022. Treasury has committed to sharing data from reports submitted by recipients to support 

transparency and accountability.

2. Capitalizing community finance partners to ensure flow of mission-driven capital to families, 

businesses, and neighborhoods that in need it most

CDFIs and MDIs play a crucial role in providing credit, capital, and financial services to low- and moderate-income 

and minority communities in urban and rural areas that have been historically underserved by mainstream banks. 

MDIs, including depository institutions where 51 percent or more of the stock is owned by socially and economically 

disadvantage individuals, have a long history of lending to communities of color. CDFIs and MDIs provide capital for 

small business growth, affordable housing preservation and development, in addition to retail and other banking 

services. While CDFIs and MDIs often serve as critical community partners both in everyday financial services and 

during disaster recovery, they often lack the capacity and capital to scale their efforts. CDFIs and MDIs often make 

smaller loans and work with borrowers who might require more time-intensive and personalized technical support. 

Disparities in mainstream lending during the COVID-19 crisis highlighted how CDFIs and MDIS fill market gaps where 

traditional institutions fail to get capital to historically disinvested communities. 
Equity Action Plan One Year Progress Report 7

In addition to the programs in progress listed below, later this year the CDFI Fund will begin the process to deploy 

the Minority Lending Program which will provide additional resources ($1.75 billion) to support lending in minority 

communities and minority lending institutions.

State Small Business Credit Initiative (SSBCI)

A. Potential Barriers to Equity

The pandemic exposed and exacerbated a number of inequities in America, including those involving small 

businesses and jobs.10 Underserved communities have long lacked access to capital, and there have been 

significant long-standing gaps in entrepreneurial financing between groups.11 The SSBCI program is intended to 

provide small businesses with access to capital to promote long-term, robust, equitable growth. The program has 

a $1.5 billion allocation for Socially and Economically Disadvantaged Individuals (SEDI)-owned businesses, as well 

as a $1 billion incentive fund for jurisdictions that show strong support for SEDI-owned businesses. The sum of 

these allocations is more than the total funding for the first SSBCI program in 2010. The program will also provide 

over $600 million in allocated funds to Tribal governments, which were consulted during the policy design process.

B. Work in Progress

Treasury issued program guidance to eligible states, Tribes, and territories in November 2021 and final 

applications are due February 11, 2022. As part of their application, Treasury requires jurisdictions to present 

a plan for expanding access to capital for underserved communities and to expend funds for SEDI-owned 

businesses. In addition, eligible jurisdictions must state how they will drive private capital to leverage SSBCI 

funds to benefit underserved communities. Treasury aimed to raise awareness for SEDI-owned businesses in 

historically underserved communities through briefings, webinars, virtual office hours, and a range of outreach 

in collaboration with Treasury’s Counselor for Racial Equity and interagency partners. SSBCI has allocated $2.5 

billion of capital program funding to support and incentivize reach to SEDI-owned businesses, including $1.5 

billion to be expended for these businesses and an additional $1.0 billion in incentive funding for jurisdictions that 

have demonstrated robust support for these businesses. Treasury has also conducted extensive Tribal government 

outreach, including a consultation, listening session, more than 20 information sessions, weekly Tribal government 

office hours, and one-on-one communication with Tribal governments. Based on this extensive engagement, 415 

Tribes submitted a Notice of Intent to apply for SSBCI funds. Applications from Tribes are due May 11, 2022.

C. Looking Ahead

SSBCI will review applications from states, the District of Columbia, and territories while assisting tribal 

governments in completing their applications. Treasury also plans to deploy $500 million to support technical 

assistance that will build a pipeline of diverse SEDI entrepreneurs with the hope these business owners can qualify 

for SSBCI-enabled financing. Technical Assistance plans can provide small businesses and SEDI businesses with 

financial advisory, legal, accounting services.

D. Assessing Impact

Treasury is developing impact reporting guidance for participating jurisdictions. Key performance indicators are 

still in development, but Treasury aims to understand the program’s reach and impact in addressing a capital gap 

for SEDI-owned businesses. 

10 Robert Fairlie, The impact of COVID–19 on small business owners: Evidence from the first 3 months after widespread socialdistancing restrictions, Journal of economics & management strategy (August 27, 2020), https://doi.org/10.1111/ jems.12400.

11 Robert Fairlie, A. Robb, D. Robinson, Black and White: Access to Capital among Minority Owned Startups, NBER Working 

Paper 28154 (November 2020), https://www.nber.org/papers/ w28154
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Emergency Capital Investment Program

A. Potential Barriers to Equity

The Emergency Capital Investment Program (ECIP) is designed to build the capacity of CDFIs and MDIs to drive 

impact capital to communities that struggled the most during COVID-19. CDFIs and MDIs are typically unable 

to access traditional capital markets like mainstream banks to scale their lending activity and operations. MDIs 

often have significantly less capital than other financial institutions, limiting their opportunity for growth, market 

expansion, or discretionary capital to make improvements to technology and operating systems. ECIP marks an 

unprecedented investment that will strengthen CDFIs and MDIs and position these institutions to make new loans 

to promote inclusive economic development as the economy recovers. 

B. Action in Progress

In March 2021, Treasury announced the application process for the Emergency Capital Investment Program (ECIP), 

an $8.7 billion program designed to support access to capital in communities traditionally excluded from the 

financial system and that have struggled the most during the COVID-19 crisis. The program allows Treasury capital 

to be invested directly in depository CDFIs and MDIs to build capacity and scale the provision of loans, grants, and 

forbearance for small and minority businesses and consumers in low-income communities. The program sets 

aside $2 billion for participants with less than $500 million in assets and an additional $2 billion for participants 

with less than $2 billion in assets. The funding will provide long-term, low-cost equity and subordinated debt for 

participating institutions. Treasury received applications from 204 credit unions, banks, and bank and savings 

and loan holding companies that requested total investments of over $12.88 billion through ECIP. This demand 

exceeded the amount available through ECIP by $4.13 billion. 

On December 14, 2021 Treasury announced that 186 CDFIs and MDIs were approved for a total of $8.7 billion of 

capital investments through ECIP, ranging from less than a million to over $200 million in long term capital. Of the 

total $8.7 billion, Treasury approved $3.1 billion to MDIs. The recipient institutions are headquartered in 36 states, 

Washington D.C. and Guam. 

C. Looking Ahead

Treasury is in the process of deploying the capital to the approved applicants. Treasury intends for this program 

to respond to economic challenges created by COVID-19 pandemic and to support access to capital particularly 

supporting underserved communities. Over the long term, Treasury expects the program will strengthen the 

viability of the CDFIs and MDIs, sustaining their role as important vehicles for fostering access and inclusion in lowincome and traditionally underserved communities. Treasury’s investments in participating institutions will be at 

a capped low-cost dividend or interest rate, with no dividends or interest payable or accruing during the first 24 

months after issuance and with the ability for recipients to access a lower payment rate depending on their growth 

in lending to minority, rural, and urban low-income and underserved communities and to low- and moderate 

income borrowers. This structure provides an incentive for impactful lending to serve vulnerable communities and 

to maximize lending reach and impact. In addition, Treasury has developed additional “deep impact” metrics to 

further incentivize targeted investments by participants in those communities most in need of capital.

D. Assessing Impact

Treasury is developing and releasing guidance to implement the ECIP and will require reporting from the 

selected recipients. Prospective ECIP applicants provided their plans to expand or maintain significant lending 

or investment activity in minority and low- and moderate- income communities, which was used to evaluate 

applications. Treasury will be able to use the future reporting to evaluate a ECIP recipient’s engagement with 

fulfilling the needs of consumers. 
Equity Action Plan One Year Progress Report 9

3. Ensuring the tax system promotes a fair economy & all Americans receive the benefits for 

which they are eligible 

A fair and equitable tax system is essential to promoting a stronger economy that works for all Americans. In 

Treasury’s initial equity review, the Department identified a need to better understand the distribution of EIPs by 

demographic characteristics, including race and ethnicity, to determine the effectiveness of outreach activities 

to underserved communities. As a follow up to this initial review, the Department has identified the CTC, the 

Earned Income Tax Credit (EITC), and the Child and Dependent Care Tax Credit as another domain to review for 

potential barriers to equitable access and has taken steps to ensure non-filers are able to receive this critical 

support. During the pandemic, the federal government looked to the Internal Revenue Service (IRS) to distribute 

hundreds of billions of dollars in financial support to American families through Economic Impact Payments. Most 

of the EIPs were provided automatically to those whose eligibility could be determined using prior year tax return 

information. This strategy could have left out millions of lower-income individuals, who are disproportionately 

people of color, who are not required to file tax returns. To address this challenge, Treasury and the IRS partnered 

with other federal agencies and community organization, ultimately making more than 26 million payments to 

those who were not required to file tax returns in 2019 or 2020.

An analysis of how the tax code affects different race and ethnic groups is central to understanding the 

consequences, both intended and unintended, of the nation’s tax laws. This improved understanding can be used 

to shape tax policy design at the inception of legislative efforts and to better implement current laws. For example, 

if the Department found that certain tax credits are more accessible to some groups than others, that information 

can be used to better target taxpayer outreach. Or, if some tax preference systematically disadvantaged certain 

groups, that information can guide efforts at tax reform.

A. Potential Barriers to Equity

A detailed analysis of taxation equity requires reliable data on the race, ethnicity, gender, and other demographic 

characteristics of individual taxpayers. Treasury’s Office of Tax Policy (OTP) is working to develop a general 

and reliable empirical methodology for analyzing the racial/ethnic equity implications of tax policy and tax 

administration questions, which could ultimately enable a better understanding of the effectiveness and equity 

of a variety of tax provisions.12 Because data on race and ethnicity are not collected as part of the tax system, OTP 

is working with agencies across the federal government to pursue several approaches simultaneously. These 

include: 1) trying to develop reliable methods to impute race and ethnicity for tax data, 2) partnering with other 

data producers to obtain microdata on race and ethnicity that can be used to validate the statistical imputations 

when legally feasible, and 3) when microdata cannot be obtained, partnering with data producers to obtain 

aggregated data that include race and ethnicity for possible analysis and to validate imputations.

B. Action in Progress

Treasury has made progress in developing sound methods to impute demographic data. In addition, Treasury and 

the IRS are examining whether and how eligible adults and families received an EIP and is estimating equity impacts 

of an outreach campaign about such payments. Once this work is completed, Treasury will publish statistics on 

the composition of EIP recipients, including estimates of race and ethnicity and other demographic characteristics, 

being careful to follow long-standing data protection protocols to prevent disclosure of taxpayer information. 

C. Look Ahead

Treasury anticipates initial results on the first and second round of EIPs in 2022, with results on the third round 

in 2023. 

12 Advancing Equity Analysis in Tax Policy | U.S. Department of the Treasury
10 Equity Action Plan One Year Progress Report

CTC and EITC 

A. Potential Barriers to Equity

Under the ARP, the amount of the CTC was increased to up to $3,600 per year for children aged five and under and 

up to $3,000 for children aged six to seventeen for 2021. The value of this investment in our children will only grow 

over time: Economists have estimated that the ARP’s expansion of the CTC will cost roughly $100 billion while 

generating about $800 billion in benefits.13 Recognizing the critical importance of CTC and EITC, Treasury has been 

working with other partners in government to increase public awareness of these benefits for eligible households, 

including many households of color. These steps have included promoting childtaxcredit.gov as a means to help 

individuals and families access accurate information about the CTC and EITC.

B. Action in Progress

In 2021, the IRS engaged in extensive communications and education efforts to reach non-filers, with a special 

focus on reaching underserved and non-English speaking communities. As part of this effort, the IRS hosted free 

tax preparation days in nearly 30 cities across the country in June and July 2021, participated in more than 250 

partner events on CTC, and developed online materials and toolkits. In December 2021 and January 2022 IRS sent 

letters taxpayers who received EIPs and/or advance CTC payments to provide information on how to file their tax 

returns and claim the remaining credits for which they are eligible.  Particularly important in these efforts was 

the development of the ChildTaxCredit.gov website. The project was intended to provide a more plain-language 

source of information for taxpayers on a trusted .gov domain and guide potential beneficiaries to reliable, free 

tax filing resources. Feedback on our outreach efforts in 2021 indicated that the imprimatur of a .gov site was an 

important feature when people were looking for information that they could trust about the new and expanded tax 

credits available through the ARP. 

In addition, shortly after the enactment of the ARP, Treasury and the IRS published guidance that authorized 

simplified tax return filing procedures which allowed the Free File Alliance to provide a “Non-Filer” tool starting in 

June 2021 and maintain it through the end of filing season in 2021. A third-party non-profit, Code for America (CfA), 

also developed a simplified filing tool for lower-income taxpayers that went online in August 2021. After the rollout 

of the Free File Alliance Non-Filer tool and the launch of a third-party CfA tool, Treasury staff helped conduct more 

than 40 navigator trainings in 2021, which provided training for more than 7,000 potential CTC navigators in English 

and Spanish. Due to Covid restrictions, these were held virtually in partnership with non-profit organizations and 

federal agency partners. Treasury and the IRS have issued similar guidance this year, allowing simplified filing 

tools for low-income individuals to come online after the close of filing season. 

C. Looking Forward

Treasury is leveraging the insights gained from outreach and engagement on multiple rounds of EIPs and the 

advanced CTC payments to inform its approach to the 2022 tax filing season, and in particular the best way to 

reach those that are not required to file federal taxes and infrequent filers. Recipients of advance CTC payments 

are eligible to receive the second half of their benefit, and potentially millions of eligible taxpayers who did not 

receive advance payments in 2021 are eligible to receive the full benefit, so continued outreach is paramount. 

In addition, many families in Puerto Rico are eligible for the full CTC benefit for the first time. However, since 

historically few residents of Puerto Rico have been required to file federal taxes, communicating the availability of 

the benefit, and ensuring access will require significant engagement. Treasury will work with the CTC coalition and 

advocacy organizations to ensure the approach meets the needs of the communities. 

13 Child-Allowance-CBA-Brief-CPSP-August-2021.pdf (squarespace.com)
Equity Action Plan One Year Progress Report 11

D. Assessing Impact

Treasury is committed to understanding the impact of CTC awareness efforts. Following the conclusion of the tax 

filing season the Department will continue to engage with community organizations, state and local governments, 

and other federal agencies to listen and receive feedback on the impact and efficiency of outreach efforts; work 

with VITA providers and philanthropic supporters to understand efficacy of their activities; coordinate with IRS to 

share, to the extent possible, information on volume and amount of returns flowing to LMI families; coordinate 

with external researchers in an effort to understand what external data may be able to tell us about the program 

and its impact. The Department will also leverage insights from EIP analysis to examine opportunities to further 

strengthen future outreach and disbursements areas.

4. Reforming government debt collection practices

At the end of FY 2021, the outstanding amount of non-tax receivables (debts) owed to the United States was $2.1 

trillion. These receivables included loans to students, small business owners, homeowners, farmers, and veterans. 

They also included administrative non-tax receivables, including fines and penalties, overpayments, and fees. 

Most Americans pay their debts on time. However, at the end of FY 2021, delinquent non-tax debt owed to the 

federal government totaled $197.7 billion. The collection of delinquent debts helps fund government operations, 

maintain key programs, and reduce the federal deficit. Therefore, it is important to continually find ways to costeffectively collect the delinquent debt owed to the government while providing debtors with due process and the 

opportunity to repay debt in accordance with their financial ability. 

The Bureau of the Fiscal Service (Fiscal Service) helps federal agencies collect delinquent nontax debts owed to 

them. Pursuant to the Debt Collection Improvement Act of 1996 and other federal laws, federal agencies generally 

must transfer non-tax debts delinquent more than 120 days to the Cross-Servicing program14 and the Treasury 

Offset Program (TOP).15 In addition to administering these debt collection programs, Fiscal Service also issues 

debt collection guidance to federal agencies, in partnership with the Department of Justice, through the Federal 

Claims Collection Standards (FCCS). The FCCS prescribe standards for the administrative collection, compromise, 

and the suspension or termination of collection activity for federal non-tax debts. They also prescribe standards for 

referring claims to the Department of Justice. 

A. Potential Barriers to Equity

Because both the Cross-Servicing program and TOP are governmentwide programs that affect a wide array of 

agencies and individuals, it is important to evaluate whether these programs have standards in place to promote 

equitable outcomes in federal debt collection. Likewise, because the FCCS provide rules and guidance to all 

federal agencies on the collection of federal nontax debts, the FCCS are also important to analyze because agency 

programs which rely on the FCCS to inform their debt collection practices may disproportionately affect some 

historically underserved communities. 

B. Action in Progress

Along with the Department of Justice, Fiscal Service continues to work with federal agencies to examine potential 

reforms in debt collection practices, particularly through changes to the FCCS. The FCCS describe when debtors 

14 Through the Cross-Servicing program, Fiscal Service uses a variety of tools to collect debts, including garnishing wages 

administratively, referring debts to TOP, reporting debts to credit bureaus, and referring debts to private collection 

contractors.

15 TOP matches people and businesses who owe delinquent debts with money federal agencies are paying (for example, 

tax refund payments). To the extent allowed by law, when a match happens, TOP withholds (offsets) money to pay the 

delinquent debt.
12 Equity Action Plan One Year Progress Report

can be offered compromise or installment agreements; the terms of those agreements; how interest, penalties, 

and costs are assessed; matters related to communicating with debtors; the use of private collectors; when 

agencies may or must pause or end their collection efforts; the standards for referring claims to the Department 

of Justice; and other debt collection matters. The FCCS also provide agencies with flexibility to adopt agencyspecific regulations, tailored to the legal and policy requirements applicable to the various types of federal debt, to 

maximize the effectiveness of federal debt collection procedures.

C. Looking Ahead

In examining the FCCS, Fiscal Service will seek to determine the extent to which regulatory changes could be made 

to help promote more equitable outcomes. As part of its ongoing outreach efforts, Fiscal Service will engage with 

creditor agency stakeholders to identify issues of equity for underserved communities within their debt portfolios 

and to determine appropriate steps that could be taken to address those issues. 

Fiscal Service will also examine whether there are ways to improve communication with debtors once they are 

referred to Cross-Servicing and/or TOP, including by determining whether to expand language options, how to 

present information more clearly, and how to better educate debtors about their rights to dispute or resolve debts 

when they disagree with or have an inability to pay their debts. For example, TOP’s Interactive Voice Response 

(IVR) system is currently available to debtors who have questions about their debt, but it currently only provides 

options for English, Spanish, and Telecommunications Devices for the Deaf line services. The Fiscal Service website 

provides the public with information including how Cross-Servicing and TOP work and links to other government 

websites. The website is only available in English. Fiscal Service is determining if additional options are needed to 

expand the TOP IVR and Fiscal Service website. In the context of its Cross-Servicing program, Fiscal Service will also 

determine whether it is using the most appropriate process to determine financial hardship and whether it can 

standardize processes to promote equitable outcomes.

D. Assessing Impact

Fiscal Service will continue to establish project timelines and specific milestones for this work as part of its 

established roadmap process. It will also work to manage these actions consistent with the Department of 

Treasury’s FY 2022-26 Strategic Plan. Fiscal Service will also continue communication with creditor agencies 

through regularly scheduled engagement meetings and quarterly calls to maintain information sharing with our 

federal agency partners regarding equity discussions.

5. Expanding opportunity through contracting and procurement

Since the submission of the 200-day Progress Report, Office of Management and Budget (OMB) released 

Memorandum M-22-03, Advancing Equity in Federal Procurement, which identified five management actions 

agencies must take to advance equity. In response, senior leaders chartered the Treasury Procurement Equity 

Council (TPEC). The TPEC consists of members the Office of the Procurement Executive (OPE), Office of Small 

and Disadvantaged Business Utilization (OSDBU), Office of Minority and Women Inclusion (OMWI), Office of Civil 

Rights and Diversity (OCRD), Office of Strategic Planning and Performance Improvement (OSPPI), Office of Chief 

Information Officer (OCIO), and every bureau procurement office. 

A. Potential Barriers to Equity

In the 200-day Barrier Assessment Report, Treasury identified three areas to assess to increase opportunities for 

small businesses and underserved communities to have access to Treasury contracting opportunities: (1) whether 

the Government-wide use of category management contracts impacts opportunities for members of underserved 

and disadvantaged businesses to compete for Treasury’s contracts, especially in our Small Business Administration 
Equity Action Plan One Year Progress Report 13

(SBA)-mandated goaling areas; (2) whether additional technical assistance and outreach is needed to advance 

equity in Treasury’s contracting and procurement efforts; and (3) whether there are missed opportunities in 

Treasury’s contracting to use small business set asides. 

B. Action in Progress

Treasury has made real progress on fostering an environment to advance equity in federal procurement. The 

Department revised category management and related acquisition policies to prioritize equity and supplier 

diversity instead of focusing exclusively on contracting efficiency and savings. Treasury worked with the Small 

Business Administration (SBA) to set Treasury’s fiscal year 2022 minimum small business goal of 39 percent (of its 

annual eligible small business dollars), with 10 percent to small-disadvantaged businesses, 5 percent to womenowned small businesses, 3 percent to service-disabled veteran-owned small businesses, and 3 percent to small 

businesses in historically underutilized small business zones. The Department is also collaborating with the SBA 

and OMB to define “new entrant” and employ tracking mechanisms to measure improvement in attracting new 

entrants to Treasury procurement. Treasury conducted or participated in 24 outreach events, joint industry days, 

webinars, and matchmaking sessions to encourage new entrants to Treasury procurement space, capture new and 

advanced technologies, and increase the procurement readiness of those businesses wanting to know how to do 

business with Treasury.

Treasury is also identifying ways to reduce barriers to its designation of financial institutions as financial agents of 

the government, a process that is not governed by the Federal Acquisition Regulations. In FY21, Treasury engaged 

a Minority Depository Institution (MDI) as a Treasury-designated financial agent and is working with two MDIs 

as contractors to other financial agents. Treasury began revising its Financial Agent Selection Procedure (FASP) 

documentation to improve opportunities for small financial institutions to compete for financial agent services 

and drafted changes to its standard Financial Agent Agreement clauses to gain insight into the use of small 

businesses as contractors by financial agents. 

C. Looking Ahead

Treasury is planning to deploy a new electronic scorecard tool of Diversity, Equity and Inclusion (DEI) status 

across Treasury that includes data on procurement equity, and has planned additional outreach events for new 

entrants and businesses in underserved communities in conjunction with the SBA, the Council on Underserved 

Communities, minority chambers of commerce, disabled business groups, LGBTQ+ businesses organizations, the 

Minority Business Enterprise Agency, and other stakeholder entities. The TPEC’s work continues to identify actions 

that advance equity and remove barriers for participation in Treasury procurement and replicate those actions 

across all Treasury bureaus.

Treasury also plans to expand the Treasury Bank Mentor-Protégé program, which consists of five financial agent 

mentor institutions that are voluntarily assisting 13 protégé institutions.

D. Assessing Impact

The TPEC prioritizes these and other planned actions to advance procurement equity using a logic model to drive 

outputs and outcomes that support the Administration’s goals around equity. These actions will increase equity 

in procurement at Treasury by removing barriers to entry for underserved businesses, increasing opportunity 

for these businesses to participate in Treasury procurement, and helping identify underserved businesses to fill 

Treasury’s procurement requirements. 
14 Equity Action Plan One Year Progress Report

Treasury will track near- to mid-term (1-4 years out) progress by monitoring small business achievement in all 

categories of contracting and subcontracting. Specifically, Treasury will track SDB achievement in FY 2022 to 

support the Government-wide goal of 11 percent in FY 2022 and 15 percent by FY 2025; and contracting with 

minority-owned, women-owned, and new entrant businesses against relevant benchmarks. Finally, the TPEC will 

review and update progress by tracking outputs and outcomes that support equity goals.

Equity achievement will be included in organizational quarterly performance reviews at the bureau level 

and aligned within the FY 2022-2026 Treasury Strategic Plan. Transparency of progress toward equity goals 

(procurement and non-procurement) will increase through dashboards and reporting, and the TPEC will adjust 

implementation plans according to metrics collected through these mechanisms.

Resources Dedicated to Civil Rights Enforcement

Title VI of the Civil Rights Act requires federal agencies to conduct pre- and post-award compliance reviews and 

investigate and adjudicate any complaints alleging discrimination in its programs responsible for disbursing 

federal financial assistance. Due to the increase in federal financial assistance that Treasury began providing 

under ARP, the Office of Civil Rights and Diversity (OCRD) requested and received the approval for additional staff 

to meet the new civil rights compliance obligations. As part of OCRD’s post-award civil right compliance reviews, 

the Department will be able to determine if funds have been distributed equitably and are reaching its intended 

recipients, members of underserved communities. OCRD is also available to provide recipients of federal financial 

assistance with technical assistance on civil rights compliance. 

Structure and Accountability

Treasury’s FY 2022-2026 Strategic Plan includes specific goals and objectives for advancing equity across mission 

areas and in Treasury’s operations. Equity is identified as a cross-cutting theme in 15 of 19 objectives in the 

Treasury FY 22-26 Strategic Plan. Additionally, strategies to mitigate long-term disparities in economic outcomes 

and promote equitable growth as well as measures to track progress towards these objectives are embedded 

throughout the plan. By elevating equity in the Strategic Plan, Treasury is emphasizing the organizational 

importance of this work and holding itself accountable through the regular accountability process, including 

quarterly and annual organizational performance review sessions. Treasury seeks to promote a culture of 

evidence-building and continuous learning by integrating evidence-building plans into our strategic plan. During 

the strategic planning process, Treasury leaders developed of the Department’s first Learning Agenda, which 

includes several key questions to continue the work begun in the equity assessment. Treasury plans to commit 

resources to better understanding the extent to which economic recovery programs are advancing equity and 

having the intended impact on underserved communities.

In October 2021, the Secretary also appointed the Department’s Counselor for Racial Equity, who will help drive 

Department-wide efforts to advance racial equity and will play a central role along with the Office of Civil Rights 

and Diversity to monitor progress on the actions specified in the Department’s Equity Action Plan. In 2021, the 

Department also created the Office of Community Engagement (OCE) to foster direct connections with community 

and business stakeholders. OCE has facilitated dozens of listening sessions with a diverse set of stakeholders 

representing Black, Hispanic, AAPI, Native American, LGBTQIA+, and rural families, neighborhoods, and businesses. 

The increased engagement has ensured Treasury teams are benefitting from real-time feedback from those closest 

to the communities for whom the Department aims to strengthen its services and impact. 
Equity Action Plan One Year Progress Report 15

A Look Ahead

Treasury continuously evaluates its practices, services, and policies to ensure every opportunity is taken to 

advance the Biden-Harris Administration’s equity agenda. In our next report:

•	 Assessing the impact of climate change on households and communities: Treasury is leading 

the work of 23 federal entities that comprise the Financial Literacy and Education Commission 

(FLEC) to better understand climate-related financial risks to households, especially in low-income 

and historically disadvantaged communities. The FLEC’s analysis draws on expertise and data 

from across the government to assess how households, communities, and the smallest businesses 

experience the financial impacts of climate change and climate transition; identify which groups 

and regions will be most affected; and consider what tools and best practices could strengthen 

household resilience to climate-related financial risks and support an equitable transition. The 

FLEC will seek input from Tribes, state, local, and territorial governments, and other stakeholders to 

inform its analysis and recommendations for policies and actions that will build household climate 

resilience, to be released later this year.

Economic Analysis: Treasury is deepening the Department’s understanding of wealth data as an 

indicator of economic opportunity amongst historically excluded racial and ethnic groups and 

other communities with disproportionately low wealth. According to the most recent wealth data, the 

median wealth of white households is 7.8 times more than that of Black households and 5.2 times more than that 

of Hispanic households,16 while the rate of homeownership among white Americans is 1.7 times more than the 

rate among Black Americans.17 In the paper “The Economics of Child Care Supply in the United States,” Treasury 

discussed inequities in child care supply, including by race and discussed how low wages earned in the industry are 

disproportionately for women of color. Treasury’s Office of Economic Policy is planning a blog post on the racial 

wealth gap. Additionally, in the forthcoming report examining Labor Market Competition, Treasury will include 

demographic analysis of several aspects of labor market power. 

16 https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-surveyof-consumer-finances-accessible-20200928.htm#fig2

17 https://www.urban.org/urban-wire/breaking-down-black-white-homeownership-gap