Add’l funding would help CDFIs reach ‘left behind’ businesses, families

May 5, 2020

CUNA continued its push for increased Community Development Financial Institutions (CDFI) funding due to the coronavirus disease (COVID-19) this week, joining more than 100 organizations from around the country in sending a letter to Congressional leadership and appropriators. CUNA joined a group of organizations last week on a similar letter, both asking for a $1 billion appropriation to the CDFI Fund in the next round of COVID-19 relief legislation.

Certified CDFIs are eligible for grants, equity investments and other awards from the CDFI Fund, which is administered by the Treasury.

“CDFIs provide financial services in urban neighborhoods and rural areas underserved by traditional financial institutions, particularly those with high rates of poverty and unemployment. Over 1,100 certified CDFIs across the country are working on the front lines of the current economic crisis, triaging distressed businesses, helping families avoid foreclosure or eviction through credit and housing counseling, and working to help stabilize struggling economies,” the letter reads.

The organizations note that Congress provided $100 million for the CDFI Fund in 2009 during the last financial crisis and CDFIs were able to leverage $12 for every $1 of federal funds.

“It took more than a decade for many small towns and economically distressed neighborhoods to recover from the Great Recession. We can do better,” the letter reads. “The dire and unprecedented economic circumstances in rural and urban communities across the country demand a more aggressive federal response. We strongly urge you to provide $1 billion to the CDFI Fund and ensure relief funds reach tens of thousands of small businesses and families left behind by previous relief packages.”

As of April 14, there are 324 credit unions certified as CDFIs, out of 1,142 CDFIs nationwide.