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Earlier this week, Senator Robert Menendez of New Jersey circulated a Dear Colleague to his fellow Senators asking Senate appropriators to allocate the same level of funding for the CDFI program in fiscal year 2018 as it received in FY 2017.
The CUNA-League System, individual credit unions, and concerned credit union members saw their extensive lobbying and grassroots efforts pay off last week when Congress passed a compromise omnibus spending bill for fiscal year 2017. In this bill, Congress fully funded the Community Development Financial Institutions (CDFI) Fund at $248 million. This funding amount is not only significantly higher than the $233.5 million that was spent in FY 2016, but also noteworthy given the fact that the Administration requested that the Fund be eliminated in the bill.
A team effort will again be necessary to keep the CDFIF fully funded for FY 2018, similar to the work done for FY 2017. CUNA and the Leagues have already started a comprehensive plan to lobby the Senate and House Appropriations Committee, including engaging in a grassroots effort with CDFI credit unions.
America’s credit unions welcome Senator Menendez efforts to spearhead this initiative. Please reach out to your Senators and their staff and ask them to sign onto this important letter by contacting Keith Roachford (Keith_Roachford@menendez.senate.gov) by May 19th. The full text of the letter is available below.
May 2017 The Honorable Shelley Moore Capito The Honorable Chris Coons Chairman Ranking Member Subcommittee on Financial Services Subcommittee on Financial Services & General Government & General Government Senate Appropriations Committee Senate Appropriations Committee
Dear Chairman Capito and Ranking Member Coons:
We write to request that the Financial Services and General Government Appropriations Act for Fiscal Year (FY) 2018 provide $248 million for the Community Development Financial Institutions Fund. This is the same funding level as FY 2017.
The Community Development Financial Institutions Fund (CDFI Fund) was established within the U.S. Department of Treasury in 1994 to promote community development in economically distressed urban and rural areas by investing in mission-driven financial institutions, known as community development financial institutions (CDFIs). By leveraging over $12 in private capital to every $1 in federal support, CDFIs are filling the yawning credit gap encountered in many communities, creating jobs improving housing and community facilities and creating economic opportunity.
There are now 1,049, including 74 Native CDFIs, working in low-wealth communities and low income populations across the country. This includes 45 loan funds, 294 credit unions, 199 depository institution holding companies, banks or thrifts, and 11 venture capital funds--all providing the flexible, patient capital and financial services that consumers, small businesses and communities need to grow and thrive. CDFIs serve urban and rural communities and reach market sectors that traditional financial institutions cannot and the ultimate goal of a CDFI is to transition their customers into the mainstream economy as bank customers, home owners and/or entrepreneurs.
CDFIs use these competitively awarded federal dollars to leverage, loan and invest in urban and rural communities across the country where they are creating jobs and strengthening local economies. In FY 2016 alone, CDFIs made over 39,000 loans or investments totaling over $3.6 billion and financed more than 11,000 small businesses. The CDFI Fund also administers the New Market Tax Credit Program and the CDFI Bond Guarantee Program, both designed to generate lending and investing to promote community revitalization, business development, and job creation in economically distressed communities.
The CDFI Fund provides resources for a range of innovative and effective programs that enable CDFIs to address the needs of their target markets. CDFI Fund programs include: Financial Assistance (FA) and Technical Assistance (TA) awards to small and emerging CDFIs as well as established CDFIs, the Native American CDFI Assistance (NACA) Program aimed at increasing the number and capacity of CDFIs serving Native communities; Healthy Food Financing Initiative (HFFI) to expand financing for healthy food options in underserved urban and rural communities; the Bank Enterprise Awards (BEA) program providing monetary awards to FDIC-insured banks that invest in low income communities and/or CDFIs and a new small dollar loan program.
We appreciate the important work that CDFIs do in our home states financing new and growing businesses, delivering financial services to distressed urban neighborhoods and remote rural areas, and facilitating the development of strong economically vibrant communities. However, CDFIs need access to capital now more than ever. This is evidenced by the application demand, nearly 4 times the availability of resources.
We strongly urge you to continue supporting the work of CDFIs by including $248 million for the CDFI Fund in the FY 2018 appropriations bill.
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