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Discussion Paper
Expanding Their Reach: New Products and Services CDFIs Want to Provide
Community development financial institutions (CDFIs) are financial institutions with a mission to serve low- and moderate-income (LMI) individuals and communities. Since 2019, the Federal Reserve has fielded the national CDFI Survey to learn more about these institutions and how they are faring and evolving. This spring, we fielded the 2023 CDFI Survey and received responses from over 450 CDFIs nationwide. Survey results have shown that demand for CDFIs' products and services has continually grown for years. As a result, many institutions are looking to expand what they offer to their ...
Journal Article
Building CDFI Capacity in Lending and Business Models
Over the past three decades, community development financial institutions (CDFIs) have been nimble innovators, offering products and services to people, projects, and organizations that mainstream financial institutions could not or would not serve. They opened new lending pathways to address some of the most stubborn challenges facing poor communities across the country. The focus of CDFIs was originally on financing affordable housing and then shifted in recent years to financing schools and child-care centers, healthful food markets, small and microbusinesses, and community health centers.
Journal Article
Breakthroughs in CDFI Capital Access
For a long time, community development financial institutions (CDFIs) have wanted to raise larger amounts of capital in order to make more loans and have greater social impact. A significant step in that quest was two California CDFIs being issued Standard and Poor?s (S&P) ratings in April 2015. Two other important moves to raise capital are seven CDFI intermediaries raising $525 million through the CDFI Fund?s CDFI Bond Guarantee Program (BGP) and 35 nondepository CDFIs becoming members of the Federal Home Loan Bank (FHLB) system. This article explores each of these developments.
Journal Article
CDFIs: What’s in a Name?
The Community Development Financial Institutions (CDFI) Fund in the U.S. Department of the Treasury has certified more than 1,000 organizations as CDFIs in accordance with the Riegle-Neal Interstate Banking and Branching Act of 1994.1 This year, the CDFI Fund will determine which of these CDFIs it will recertify. Although this work is extremely timely, it is also time-consuming.
Journal Article
The Reinvestment Fund at 30: Insights and New Directions
Thirty years ago, a small group of community developers, activists, and business people formed a community loan fund in Philadelphia called the Delaware Valley Community Reinvestment Fund. In 1999, the organization was renamed The Reinvestment Fund (TRF). TRF is certified as a community development financial institution (CDFI) by the U.S. Department of the Treasury?s CDFI Fund. Since 1985, TRF has made $1.5 billion in loans and investments and has financed housing, community facilities, supermarkets, commercial real estate, and energy-efficiency projects. The CDFI has been a leader in ...
Journal Article
CDFIs: Intermediaries for Financing to Low-Income Communities
In communities across America, community development financial institutions (CDFIs) successfully connect the ?last mile? of the financial credit chain. Just as local cell phone towers across the country connect cellular networks to local users, CDFIs connect larger and remote sources of capital to local communities. CDFIs act as intermediaries of capital to advance their missions, proving that responsible investing can build incomes, assets, and wealth in low-income communities. Increasingly, CDFIs also intermediate market data and other information necessary for successful investments in the ...
Discussion Paper
Partnerships between Community Development Financial Institutions and Workforce Development Organizations
Inability to secure capital to improve worker skills or expand training programs can prevent growth in a local economy. This paper presents the role CDFIs can play to fill a need for financing in the workforce development sector. While the transactions presented in this paper are unique, they highlight the importance of partnerships between the two industries. Shared missions and an overlapping client base between CDFIs and workforce development practitioners creates a natural pairing for collaboration. In addition, CDFIs are uniquely able to serve as test beds for innovation because of their ...
Journal Article
New CDFI Community Investment Fund
The Opportunity Finance Network (OFN) and Woodforest National Bank (NB), based near Houston, TX, created a new fund in early 2017 to provide equity-equivalent investments to community development financial institutions (CDFIs) in Woodforest NB?s 17-state region, which includes Pennsylvania
Journal Article
Spotlight on Research: The Impact of Government Subsidized Lending: Community Development Financial Institutions Fund
Access to credit in all segments of the population not only enhances the financial viability of individuals and their communities but also contributes to a robust economy. However, for various reasons, the private sector might not supply an adequate amount of credit or capital to meet the demand in certain areas. In these instances, the government might step in and bridge the gap. One approach taken by the federal government is to provide funds from the Community Development Financial Institutions (CDFI) Fund to financial intermediaries such as community development financial institutions ...