Removing Barriers Blog

SBA announces PPP set aside for CDFIs
Posted May 29, 2020 by CUNA Advocacy

The Small Business Administration (SBA) announced it is setting aside $10 billion of Paycheck Protection Program (PPP) Round 2 funding to be lent exclusively by Community Development Financial Institutions (CDFIs). CDFIs work to expand economic opportunity in low-income communities by providing access to financial products and services for local residents and businesses.   

The PPP ran out of its initial $349 billion in funding, and Congress approved a second round of $310 billion in April. Of that, $60 billion is allocated to insured depository institutions with below $50 billion in assets. The $10 billion set aside for CDFIs announced Thursday comes out of that $60 billion.

According to the SBA, as of May 23 CDFIs have approved more than $7 billion ($3.2 billion in Round 2) in PPP loans.

Earlier this month, CUNA's Chief Advocacy Officer wrote to all 535 Congressional offices in support of funding for the CDFI Fund. CUNA has called for a $1 billion appropriation for the CDFI Fund, which gives grants, equity investments and other awards to certified CDFIs.  

“Small but crucial investments can pay dividends in helping moderate- to low-income families who are particularly vulnerable during this economic crisis,” Donovan wrote. “CDFIs take a market-based approach to supporting economically disadvantaged communities, helping neighborhoods that lack access to financing foster and sustain a prosperous future.”

Credit unions are ready to help those who need it most  

Donovan provided a link to CUNA’s latest one-page document on the CDFI Fund and how credit unions use it to enhance their communities. In its previous communications with Congress, CUNA has noted that during the last financial crisis CDFIs were able to leverage $12 for every $1 of federal funds.