Vermont bankers support technical fixes in H.398, flag first-time VIDA direct‑lending authority

At a Friday hearing of the Vermont House Committee on Commerce and Economic Development, Chris Delia, president of the Vermont Bankers Association, voiced conditional support for H.398 and urged coordination between state housing authorities and banks to avoid undercutting existing programs.

Delia said H.398 makes “technical miscellaneous changes” to VIDA statute that he supports and described a proposed disaster‑recovery fund provision as "the first time in their statute where they would have the authority to do direct lending to businesses." He called that change small in scale and said he expects the authority would be used sparingly for disaster recovery.

Why it matters: the bill would clarify VIDA’s statutory language, create a new disaster‑recovery lending tool, and add housing provisions that could overlap with existing housing agencies. Those changes could affect how housing and recovery projects are financed and how banks participate in commercial and housing lending.

Delia framed his position around three elements of the bill. On the technical edits, he told the committee he had discussed the statutory cleanup with VIDA staff and described the changes as sensible. On the disaster‑recovery fund, he acknowledged the novelty of direct‑lending authority in VIDA’s statute but said he and his members have a cooperative, “participatory relationship” with VIDA on commercial transactions and expected the agency to leverage funds and work with local lenders.

On the housing provisions, Delia said banks work closely with both VHFA and VIDA and urged that any new VIDA tools be “additive instead of replacing” existing VHFA programs. He said the committee could allow the two agencies to try working together over the next year without immediate legislative mandates, or require a follow‑up report to the Legislature in a year or two before making the change permanent.

Delia also summarized lenders’ market feedback to the committee: capital is available but many projects “just don’t pencil out,” citing higher labor and material costs, permitting delays and appraisal shortfalls as barriers. “There’s plenty of capital out there if those projects would cash flow appropriately,” he said.

Committee leadership closed the session by outlining next steps: staff will post the updated draft that addresses crypto‑related language and the committee plans to take up related bills this week, including H.398. No formal votes were recorded at this hearing.

The discussion combined testimony about statutory technical fixes, a narrow disaster‑recovery lending authority, and how any new housing financing tool should be coordinated with VHFA and market lenders to avoid unintended consequences.