New York Coalition Highlights CDFIs' Growing Clout in Economic Recovery
The White House and Congress are starting to recognize the impact community development financial institutions are having in providing affordable housing expansion, small business support and financial services to urban and rural areas.
That was the message at the recent New York Coalition of CDFIs Statewide Conference organized by the National Federation of Community Development Credit Unions. More than 100 industry leaders turned out to hear about the financial landscape for affordable housing development and small business lending and the impact of the economic downturn on low- and moderate-income families and communities.
In 2008, New York's CDFIs had almost $2 billion in loans outstanding to affordable housing projects, nonprofit facilities and small businesses in the state, according to Sen. Brian Foley (D) of Long Island, chairman of the Senate Banking Committee. He said research from the U.S. Treasury Department shows that CDFIs are able to leverage state dollars at a ratio of 20 to one. Foley also reiterated his support for a $15 million allocation for New York's CDFIs included in the Senate's state budget in March.
One of the coalition's goals is to ensure that the New York state CDFI fund remains in the governor's budget. A $15 million investment from the state would create as much as $150 million in community investment, according to the federation.
"This is a new day in Washington," said National Federation President/CEO Clifford Rosenthal. "We have an administration and a Congress that understand the impact of our institutions and their potential to assist in the economic recovery that our country so desperately needs."
The coalition has been seeking state support for the full range of activities CDFIs engage in including loans for affordable housing, small businesses, non-profits and child care facilities as well as asset building programs, financial literacy and entrepreneurship training. In 2007, it reached a major milestone when the New York State CDFI Fund was signed into law. The fund, to be administered by Empire State Development Corp., had strong bipartisan support in the state legislature and authorized ESDC to support community-based lenders above and beyond any other programs currently in place, according to the federation.
"Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for the economic development of individuals and small businesses, complementing ESDC's traditional large-scale economic development projects," said Melanie Stern, N.Y. coalition coordinator and senior program officer at the federation. New York has the highest number of CDFIs in the country, with more than 110 community development credit unions, loan funds, community development banks and affordable housing lenders currently operating throughout the state, according to the federation. Organizers hope state legislators will see the need for increasing funding to the New York CDFI industry in the coming years.
"While New York State faces a multi-billion dollar deficit, investing in CDFIs is one of the best investments the state could make in its own future," Stern said. "New York's investment coupled with federal and other funding sources will help jump-start local economies and go a long way toward helping struggling New Yorkers through the current recession."