The American Bankers Association joined four banking and housing lender associations in urging lawmakers to allocate at least $324 million for the Community Development Financial Institutions Fund in the coming fiscal year. The request includes at least $40 million for the Bank Enterprise Award program, or BEA, which awards FDIC-insured depository institutions for increasing their investments and support of CDFIs or increasing their own lending or service operations in severely distressed areas.
In a joint letter to leaders of the House and Senate appropriations committees, the associations said the funding request was modest compared to the size and scope of the CDFI industry. “The $354 million will leverage up to 12 times its initial value in private capital and be channeled to local businesses, affordable housing, and other drivers of economic growth in underserved rural, urban and Native American markets,” they said.
The principal channel for bank participation in CDFI Fund programs is the BEA, which has helped facilitate billions in new investments that benefit the lowest-income census tracts, the association said.
“From 2016 through 2024, BEA Program award recipients increased their lending and direct investments in these underserved communities by more than $4.5 billion. Additionally, BEA principally benefits small CDFI and community banks,” they said. “Over the past five years, 97% of all award dollars have gone to certified CDFI banks. By size, 53% of all 2024 award dollars went to the smallest banks with total assets of less than $391 million, and 90% of awards went to banks with less than $1.6 billion in total assets.”
