Community development financial institutions (CDFIs) are financial organizations dedicated to delivering responsible, affordable lending to help low-wealth and other disadvantaged people and communities. Our backdrop in lending is social responsibility and progress.
Not every bank or financial institution is a CDFI, all of which are certified by the U.S. Department of the Treasury to meet real human needs in our nation.
Just a few years ago, Michael Swack, a research professor of New Hampshire's Carsey Institute and Whittemore School of Business, completed a 5-year look at CDFIs and concluded we and others have been "stepping into the breach" to address lending-related gaps in economically depressed communities and neighborhoods, areas of our country that would have little chance for financial capital assistance without the CDFI safety net.
The value of CDFIs became even more apparent during the Great Recession when many conventional sources of development funds dried up, hitting distressed communities even harder.
In remarks delivered in Washington last year, former Treasury Secretary Robert Rubin noted that CDFIs have been "seeding innovation and helping change the outlook of disinvested neighborhoods" for the last two decades. He said CDFIs "proved a vital resource especially during the Great Recession, which took a disproportionate toll on our poorest communities." Rubin went on to say that "Bringing the residents of inner cities and distressed rural areas into the economic mainstream is central to our national competitiveness and the future of America's economy."
CSH has been a CDFI since the 1990s and we are proud of the loans and grants we have awarded to communities and local groups, nonprofit leaders creating access to supportive housing. Just this month, we announced we have surpassed the $500,000,000 mark in loans and grants to supportive housing projects across the country. This lending has resulted in the creation of 200,000 homes for individuals and families whose lives have been transformed through stable housing.
CSH could not do what we do without the help of the CDFI Fund within the US Treasury Department. They just awarded us $1.65 Million and earlier this year $40 Million in New Markets Tax Credits, money we will leverage to make nearly 200 loans producing another 6000 homes by the end of 2017.
By financing entrepreneurs and affordable housing creation, and making other investments that improve lives in low-wealth communities, CDFIs mitigate the rampant disinvestment that plagues poor areas. We help close the poverty gap.
As Congress mulls the 2016 federal budget appropriation for CDFIs, Senators and Representatives should consider the far-reaching impact and results attributed to CDFIs and approve the Administration's full request for $233.5M. It is money well spent on lending that works to transform lives and whole communities.
CDFIs do not always get the public attention they deserve, but without them, communities and people in need would have one less reason for hope.