The American Bankers Association and four trade groups on Monday asked lawmakers to increase fiscal year 2024 funding for the Treasury Department’s Community Development Financial Institutions Fund. The associations sent comment letters to House and Senate appropriation committees as well as the appropriations subcommittees on financial services in both houses.
Specifically, the trade groups asked for $500 million for the CDFI Fund, which includes a $50 million allocation for the Bank Enterprise Award Program, which provides resources to the most distressed communities. The White House budget proposes $341 million for the CDFI Fund—a “modest” amount that the groups said “does not begin to meet the needs” of the underserved communities the fund supports.
“The $500 million request in CDFI funding is modest relative to the size and scope of the regulated depository CDFI industry,” the trade groups wrote. “According to 2021 data, regulated CDFIs alone hold approximately $307 billion in total assets, and we estimate total industry assets (including loan funds and venture capital funds) to be close to $340 billion. The $500 million request, therefore, represents an extremely modest percentage of total CDFI industry assets. This capital, however, is critically important to the communities CDFIs serve. The monies will leverage up to 12 times the $1 billion in private capital that will be channeled to local businesses, nonprofits and others to help vulnerable communities.”