Request Too Low, but a Breakthrough
(February 6, 2007 – Washington, DC) The federal budget recently released by the Bush Administration has some welcome language for advocates of community development financial institutions (CDFIs), although the monetary request still falls short of the CDFI Fund’s historic levels.
For several years now, the Bush Administration has requested no funds at all for the Treasury Department’s CDFI Fund, asking instead that its functions be abolished or transferred and consolidated. This year however, the budget proposes approximately $29 million for the fund, although none for the Bank Enterprise Awards (BEA) Program which has long been an important part of the fund.
The budget request notes that “The CDFI Fund helps address the urgent problems of declining economic and social infrastructure, loss of jobs, lack of private enterprise, and deteriorating housing facing many American communities today. Government investment and technical assistance supplements private funds and expertise to ensure that CDFIs are effective in restoring and creating healthy economies.”
“While the 2008 budget figure is low, over the past few years the House and Senate have supported the CDFI Fund with appropriations of about $55 million despite the zeroing-out proposed by the President,” said Federation Executive Director Cliff Rosenthal. “We’re hopeful of a similar outcome this year and we welcome the Administration’s recognition of the value of the CDFI Fund – it’s a real breakthrough.”
The CDFI Fund is the foremost source of grants and investments in CDCUs, as well as other community development financial institutions. According to the Federation’s research, for every dollar awarded by the fund, $27 in non-federal investments is leveraged. Last year, the fund provided almost $4 million to CDCUs.
“When institutions can turn $4 million in grants into more than $100 million in investments, the impact is just tremendous. This is why the Federation and our allies have fought so hard to keep the program running,” added Rosenthal. “The House and Senate deserve much credit for recognizing the value of the Fund and keeping it alive throughout the past six years.”
© 2007 National Federation of Community Development Credit Unions.