–News Direct–
Members of the CDFI Coalition gathered in Washington, DC, this week to mark the 30th anniversary of the CDFI Fund with a keynote address by Senator Mark Warner (D-VA), panel discussions and the release of a report highlighting the three decades of successes celebrated by the CDFI movement.
Coalition members, legislators and Administrations officials held panel discussions on New CDFI Certification Requirements, Cybersecurity and AI, Financing CDFIs and Community Development, Opportunities in Climate Financing, and Challenges and Opportunities for new CEOs of Color.
The report is based on data from the Coalitions survey of its members. Highlights of the report and the 30th Anniversary of the CDFI Fund include:
- Seventy CDFIs responded to the survey, making $22.5 billion in loan originations and $185 million in EQ2 and equity investments. This financing created or sustained more than 500,000 jobs and 105,000 units of affordable housing, over 150,000 community facilities and 437,000 business.
- The CDFI industry has grown significantly since its infancy in 1994. 1,462 CDFIs have been certified to work in low-wealth communities nationwide as of January 2024. These CDFIs have assets totaling more than $200 billion and outstanding portfolios of more than $150 billion.
- Certified CDFIs include 573 loan funds, 516 credit unions, 161 depository institution holding companies, 197 banks or thrifts, and 15 venture capital funds in rural and urban areas in all 50 states and the District of Columbia, Puerto Rico and Guam.
- In FY 23, CDFI Fund Financial Assistance recipients financed more than 126,000 businesses, provided funding for more than 76,000 affordable homes, and originated more than $57 billion in loans and investments.
Thirty years ago, only a handful of CDFIs had been funded with philanthropy and other support, and their success provided the roadmap for the 1994 legislation and the impetus for the CDFI fund.
One of the more unexpected successes of the CDFI movement and the CDFI fund are the offshoots that they have supported and enabled. Significant new programs were built on the CDFI infrastructure and commitment created in 1994 by the Riegle Act.
The CDFI 30th Anniversary Report contains numerous success stories from CDFIs around the nation about how the credit, the products and the technical assistance they have made available have been transformative in their communities, said CDFI Coalition spokesperson Bob Rapoza.
For example:
- CDFI Program Financial Assistance (FA) Awards The CDFI Fund makes FA awards to both large and small certified CDFIs. CDFIs use FA awards for lending capital, loan loss or capital reserves, operations, or development services. Award recipients must match their FA award dollar-for-dollar with non-federal funds.
- The Native American CDFI Assistance Program, launched in 2001 to encourage investing in Native Communities by supporting the creation and expansion of Native CDFIs — which in turn help to create jobs, establish, or improve affordable housing, and provide appropriate financial services and counseling to community residents. The number of Native CDFIs has increased from 14 in 2001 to 66 in 2024.
- The New Markets Tax Credit Program, authorized in 2000 to stimulate private investment in low-income communities. The CDFI Fund has made 1,563 allocation awards totaling $76 billion to date. New Markets tax Credit investments have created more than one million jobs that cost the federal government less than $20,000 per job.
- The CDFI Bond Guarantee Program, authorized in 2010 to empower the Treasury Department to guarantee notes or bonds issued at no cost to the federal government to support CDFI lending and investment activity. Since 2013, the CDFI Fund has guaranteed nearly $2.5 billion in bond authority through the program.
- The Capital Magnet Fund, administered by the CDFI Fund, provides grants on a competitive basis to CDFIs and other non-profit organizations to finance affordable housing and related economic development efforts for low-income families and communities. The Capital Magnet Fund has generated $20 additional investment for every $1 of award funding and created more than 63,000 affordable homes.
The report also highlights the power of CDFIs, their investors and stakeholders in responding to our nations racial equity challenges as well as the Great Recession and the COVID 19 Pandemic.
For example:
- CDFIs served as economic shock absorbers, providing flexible and patient capital, rigorous risk management, and commitment to the projects in their communities and the sustainability of their borrowers.
- When traditional lenders pull back from economically distressed communities, policymakers look to CDFIs to fill the void. Recognizing the power of CDFIs, during the height of the pandemic, Congress made an investment in 2020 through appropriations for three temporary programs to support CDFIs, totaling $12 billion, including $1.25 billion for what became the Rapid Response Program, $1.75 billion for increased investment in low-income communities of color, and $9 billion for an emergency capital investment program for CDFIs certified depositories and MDIs.
- CDFIs used those new resources to provide a wide variety of financial services to support the recovery of underserved markets under siege from COVID-19. In addition to stabilizing businesses, CDFIs financed initiatives to expand access to healthy food, health centers and hospitals, affordable housing, shelters, treatment centers, and other businesses and community facilities on the front lines of the pandemic.
- Private sector corporations and foundations have also recognized the efficacy and power of CDFIs. For example, between 2020 and 2022, in the aftermath of the murder of George Floyd and the ongoing pandemic, the eight largest US banks made $9.2 billion in commitments to CDFIs. This commitment and the increased federal support allowed CDFIs to expand their efforts and launch new initiatives in communities of color.
As we look forward to the next 30 years, we know that CDFIs are going to continue to be a major force for bringing access to credit to low-income communities and individuals across the nation. They will be pivotal in our collective efforts to eliminate racial wealth gaps and increase opportunities for people and communities of color, Rapoza added.
CDFIs continue to innovate, to solve problems, to finance opportunities and to make sure that lending capital and technical assistance is available to all communities in our nation. In doing so, they acknowledge there is a newer and burning challenge how CDFIs can support reducing the carbon in our atmosphere and ensure that low-income communities and communities of color can access the same opportunities, tools and resources that will help mitigate the impact of climate change on our communities and economy.
The confidence of Congress and the Administration in providing such a key role to CDFIs under the Green House Gas Reduction Fund is a wonderful testament to the positive impact and reach of CDFIs in our most underserved communities, said Rapoza. We know that CDFIs will bring their innovative cultures, their commitment to serving low-income communities and communities of color, and their experience leveraging federal and philanthropic resources with private capital to make such a difference in Americas communities.
DOWNLOAD THE CDFI FUND 30TH ANNIVERSARY REPORT
About the CDFI Coalition
Community development financial institutions (CDFIs) are lenders with a mission to provide fair, responsible financing to rural, urban, Native and other communities that mainstream finance doesnt traditionally reach. The CDFI Coalition, formed in 1992, is the unified national voice of community development financial institutions. Our mission is to encourage fair access to financial resources for Americas underserved people and communities. Through its member organizations, the Coalition represents CDFIs working in all 50 states and the District of Columbia. This national network of CDFIs includes community development loan funds, community development banks, community development credit unions, microenterprise lenders, community development corporations and community development venture capital funds. The CDFI Coalition coordinates industry wide initiatives to increase the availability of capital, credit and financial services to low-income communities across the nation. For more information, visit www.CDFI.org
Contact Details
Greg Wilson
+1 571-239-7474
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CDFI Coalition
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