Federation, CDFI coalition request $1 billion from TARP

WASHINGTON (11/20/08)--The National Federation of Community Development Credit Unions and the Community Development Financial Institutions (CDFI) Coalition have urged the federal government to set aside $1 billion of its $750 billion rescue plan for capital infusions to CDFIs, including community development credit unions (CDCUs).

They said the $1 billion from the Emergency Economic Recovery Act would support increased lending and investment in low- and moderate-income communities.

The request came in the form of a letter from the coalition's board of directors to Neel Kashkari, assistant secretary for financial stability at the Treasury Department's Office of Financial Stability, and Donna Gambrell, director of the department's CDFI Fund. They are two key officials responsible for administering the Troubled Assets Relief Program (TARP).

The CDFI Coalition represents financial institutions whose mission is serving underserved communities and people of modest means.

"Congress has expressed its concern that little of the first wave of TARP investments in banks seems to be finding its way to the communities and families most in need," said Cliff Rosenthal, federation president/CEO.

"We in the CDFI movement believe that our institutions are uniquely positioned to aid some of the hardest-hit communities around America, and that moreover, we can leverage any federal funding many times over," he said.

Rosenthal said the coalition is "pleased that a number of community development banks have now gained access to the TARP program" and added that the coalition's directors "want to ensure that CDCUs and other CDFIs also gain access to this important source of capital."

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