Industry Leaders Call for Congress to Enact EB-5 Reforms

This week the industry trade association for the EB-5 Regional Center program, Invest In the USA, known as IIUSA, and CMB Regional Centers, one of the nation’s largest Regional Center operators, separately published statements calling for the U.S. Congress to take immediate action to reform and permanently reauthorize the EB-5 Regional Center program.  

current status of the Regional center program

Although the EB-5 Regional Center program has brought in billions of dollars in foreign direct investment to the US and created hundreds of thousands of American jobs, critics have claimed that investors have abused its guidelines. IIUSA and CMB’s statements appear to be a direct response to this criticism, as each emphasized the importance of integrity reforms in the EB-5 industry and the necessity of legislation to implement them. 

IIUSA states that integrity reforms are, “necessary to achieve any other significant legislative goal”, and that the industry simply does not have the leverage to address other issues until integrity reforms are implemented. Toward the end of 2020, IIUSA nearly achieved this goal. 

At that time, IIUSA began working with Iowa Senator Chuck Grassley, and Vermont Senator Patrick Leahy, to create the EB-5 Reform and Integrity Act. This bill was to be the culmination of several years of lobbying efforts on IIUSA’s part, and while there were multiple issues that they had wished to address, IIUSA stated, “[t]he only issues on the table for negotiation were: 1) integrity reforms and 2) long term reauthorization.” The goals of the Integrity and Reform bill would have been to “instill integrity reforms into the regional center program and, provide the program with a stabilizing long-term five-year reauthorization.”, and according to IIUSA it was set to pass alongside the year-end federal spending bill. However the bill was not finalized in time to be included, and while the Regional Center program was extended, it is now set to expire on June 30th 2021.

A summary and the full text of the proposed EB-5 Reform and Integrity Act, from Sen. Grassley’s official website, can be found here:

So Why Is Urgent Action Needed?

IIUSA notes that the Regional Center program is no longer tied to federal budget legislation, which is all but required to be passed by Congress. Instead, the program must now stand on its own merit in order to gain support for reauthorization, and is at risk of expiring this June unless legislation is passed. IIUSA ends their statement with a call to action, asking the EB-5 industry to rally around the Grassley/Leahy reform bill as “perhaps the only path to reauthorization”, and “acknowledge the best means to securing… needed changes is by reforming… and gaining long term reauthorization.”

The statement released by CMB group on January 18th echoed the sentiments expressed by IIUSA. In it, CMB called for legislation to reform the EB-5 program and ensure integrity in the industry. While they acknowledged the “notable progress” made by USCIS to improve the EB-5 program, CMB also stated that “USCIS was unable to accomplish everything. . .that is necessary to establish improved integrity and transparency requirements for regional centers.” CMB pointed to legislation as the only way to accomplish these integrity measures, and stated that “the time for reform is now.” Like IIUSA, CMB believes that the first priority for the EB-5 industry needs to be integrity reforms backed by legislation and a long term reauthorization of the Regional Center program. 

CMB’s statement also expands on what reforms they would like to see, beyond integrity and a long term reauthorization. CMB advocates removing dependents from the yearly 10,000 visa cap imposed on the program, believing that this would reduce backlog and “meet the demand from prospective immigrant investors from around the world”. 

The way forward

Since its inception in 1993, the Regional Center Program has frequently had to contend with short term extensions and looming expiration dates. However, as stated by IIUSA, the current situation “is NOT a business-as-usual scenario in terms of reauthorization risk”, and the EB-5 industry needs to respond. While uncertainty, certainly is anxiety inducing, EB-5 investors shouldn’t panic. IIUSA is correct in its assessment that “this crisis [can] become an opportunity”. The looming deadline of June 30 will force the industry to unite around legislative reforms to ensure integrity. The sentiments shared by the CMB and IIUSA pieces show that the industry is united in its desire to enact reforms and supports further transparency and oversight. By addressing these issues the EB-5 industry can prove to its critics that the EB-5 program is a worthwhile investment for America, and that it deserves to be continued and expanded.  

While CMB Regional Centers is a sponsor of EB5Daily.com, CMB Regional Centers took no part in the authorship/editing of this or any EB5Daily.com article.