The Community Development Financial Institutions Fund (CDFI Fund) awarded $1.25 billion in emergency financial assistance to 863 CDFIs, the largest single funding round in the agency’s history. Vice President Kamala Harris made the announcement at an event hosted by the White House on June 15. The Vice President was introduced by OFN President and CEO Lisa Mensah, and was joined by Treasury Secretary Janet Yellen, Chairwoman Maxine Waters (D-CA), and Senator Mark Warner (D-VA).
“Today’s historic announcement of federal support for CDFIs will provide greater access to capital for communities underserved by mainstream finance. Vice President Harris and the Biden Administration understand that community development loan funds, credit unions, and banks are a critical avenue for reaching marginalized entrepreneurs and communities throughout our country. Throughout the pandemic, CDFIs successfully provided essential financing to Black, Latino, Native, rural, and other communities affected by historic discrimination and more recently the pandemic’s economic impact. This new round of funding from the White House will be leveraged with private capital to do even more to create opportunities and strengthen communities,” said Mensah.
CDFIs have been a major force in delivering COVID-19 pandemic relief to distressed and underserved communities through programs like the Paycheck Protection Program. While billions of dollars in federal relief has flowed through CDFIs, this award announcement marks the first direct public sector investment in the CDFI industry’s capacity.
This historic funding level is a testament to the incredible advocacy of the CDFI industry over the past year. Throughout 2020, our members, partners, and allies joined us in urging Congress to provide an immediate infusion of grant capital to address the economic devastation of the pandemic. In a major legislative victory, the December 2020 Coronavirus Response and Relief Supplemental Appropriations Act provided $1.25 billion to the CDFI Fund for grants to deliver emergency assistance to communities impacted by the pandemic.
OFN applauds the CDFI Fund for moving quickly to deploy the CDFI Rapid Response Program (RRP) and ensure certified CDFIs of all sizes and institution types were eligible to apply for this emergency funding. The RRP awards are critical to helping CDFIs address the difficult work of reopening and rebuilding the economy. The grants will catalyze additional private sector investment, helping to generate the resources needed to drive an equitable economic recovery.
The awards represent an important down payment from the public sector to the CDFI industry but the challenges facing underserved communities require more than a one-time infusion of capital. The CDFI industry needs sustained investments at this scale to continue the work of financing justice. OFN is working to secure ongoing resources for CDFIs and asking Congress to provide $1 billion in annual appropriations for the CDFI Fund.
Contact your Member of Congress TODAY and urge them to provide sustained investments.