(March 13, 2007 - Albany, NY) On Tuesday March 13, members of the New York State Coalition of Community Development Financial Institutions – also known as the NY CDFI Coalition – gathered at the State House in Albany to press for passage of legislation that would create a permanent fund to expand community development financial services across the state. Coalition representatives met with key members of the New York State Assembly, the New York State Senate, and the Governor’s office to discuss the best structure for a New York State Community Development Financial Institutions (CDFI) Fund, which has broad bipartisan support in Albany.
The new fund would be modeled after the federal CDFI Fund, which is housed in the Treasury Department, and would provide significant infusions of growth capital to CDFIs across New York State. CDFIs are specialized financial institutions that are committed to local economic development of individuals and small-businesses, stakeholders often missed by the larger-scale economic development programs that are common in the Empire State.
CDFI practitioners from across the state attended Tuesday’s meeting, including Leni Hochman of Alternatives FCU (Ithaca, NY); Bob Radliff of the Capital Community Loan Fund (Albany, NY); David Raynor of the Leviticus Alternative Loan Fund (Yonkers, NY); Jennifer Thomson of the Lower East Side People’s FCU’s non-profit affiliate, the People’s Center for Economic Independence (New York, NY); Rafael Morales, NY CDFI Coalition Coordinator and Public Affairs Officer at the National Federation of Community Development Credit Unions (New York, NY); Justine Zinkin of Neighborhood Trust FCU (New York, NY); Norah McVeigh of the Nonprofit Finance Fund (New York, NY); and Denise Belser of Seedco Financial Services (New York, NY). Amy Kramer and Juan Hernandez of the New York State Credit Union League also joined the group to help represent all credit unions in New York State.
“There is no other program like this anywhere else in the United States,” said Morales, “If we succeed, New York State will provide the nation with a model asset-building strategy that supports both big industry and individual entrepreneurship – the impact could be tremendous.”
New York CDFI Fund – Once Old, Now News Again
Organized more than a decade ago, the NY CDFI Coalition has been staffed by the National Federation of Community Development Credit Unions (the Federation), itself a federally-certified CDFI, since the very beginning.
The Federation was closely involved in forming the national CDFI Coalition that advocated for the creation of the Federal CDFI Fund and the Federation’s Executive Director, Cliff Rosenthal, served as the first Chairman of that coalition.
“In the late 80’s the Federation actually tried to create a CDFI program in New York before the concept of CDFIs even existed,” said Rosenthal. “Our efforts at the state-level were somewhat limited early-on, but that all began to change after President Clinton signed the Federal CDFI Fund into law in 1994.
“When the federal Fund was created, we expected the floodgates to open at the state level,” added Rosenthal. “However, that fund has been much slower in materializing than previously anticipated.”
Over the past five years, the state has operated a small grant program administered by the Empire State Development Corporation (ESDC) with a yearly appropriation of $1 million to $1.5 million, specifically supporting CDFI lending to minority- and women-owned small businesses. Despite this success, the women and minority small business program has fallen far short of the demand for capital from CDFIs in New York; consequently, year after year, the NY CDFI Coalition has met with the state legislature to request increases in the size and scope of state funding available to CDFIs.
A New Era for CDFIs in New York is on the Horizon
For most of the past decade, the Coalition’s efforts were championed by the State Assembly, which unanimously passed bills to expand the CDFI Program that failed to gain support in the Senate. That changed in 2006, when the Coalition was able to sit down with the State Senate, the State Banking Department, and ESDC to craft a CDFI bill that was acceptable to the Senate and contained a workable mechanism for running a state CDFI Fund.
The bill that passed in 2006 amended the New York State Urban Corporations Act to allow ESDC to operate a significantly expanded CDFI program with the advisory committee selected by ESDC itself. This important provision untangled much of the political gridlock that had stymied previous bills.
“Unfortunately, the Senate bill passed too late in the 2006 legislative session to be reconciled with the Assembly’s bill,” said David Raynor, President of the Leviticus Alternative Fund in Yonkers, and member of the NY CDFI Coalition Steering Committee. “Since that time we have concentrated our efforts on getting a workable and reconciled bill passed in both chambers of the legislature. If we can get this signed into law this year, then we can focus our efforts next year to get the funding we need.”
Just five days before the Coalition’s meetings, Senator Farley reintroduced last year’s CDFI bill under a new number, S3575.
“Having a bill number we could actually refer to at our meetings was very important,” said Morales. “When we met with the Assembly Banks Committee staff we were able to show them the legislation that had just been reintroduced.”
Less than a week after that meeting, Assemblyman Towns, Chairman of the Assembly Banks Committee, introduced Assembly Bill A6681, reconciled to S3575.
“The speed in which they were able to turn this around has been very encouraging,” said Raynor. “We are quite optimistic with the prospects of this legislation and hope to have the bills passed in the Senate and Assembly later in the spring. We are confident that with proper funding a state CDFI Fund will help New York CDFIs leverage millions of dollars in federal and private monies to assist thousands of low-income New Yorkers and small businesses.”
Coordination Between City and State Looks Bright
In New York City, Mayor Bloomberg recently announced the creation of the Office of Financial Empowerment, to coordinate a unified poverty alleviation strategy in the City. Cathie Mahon, a former Federation staff member and long-time senior consultant was appointed to head that office.
“For the past five years Ms. Mahon served as the Coordinator of the NY CDFI Coalition,” said Rosenthal. “Her familiarity with the work of CDFIs will undoubtedly bring additional synergies between the City’s asset-building initiatives and the Coalition’s work at the state-level.”
“This is a pivotal year for CDFIs in New York, but this is by no means a done deal,” said Morales. “We definitely need New York CDFIs to step-up and support our efforts. For more than a decade the Federation has staffed the NY CDFI Coalition almost exclusively from its own resources. This year we may receive some grant funding, but we really need CDFIs across the state to become more active in our Coalition. The next few months will be crucial to our success. We will likely need to make another visit to Albany, but more importantly, CDFIs across the state need to contact their legislators and express their support of this initiative.”
CDFIs interested in joining the New York Coalition of CDFIs, or wanting additional information can contact Rafael Morales, Coalition Coordinator at firstname.lastname@example.org, or at (800) 437-8711, ext. 206.
Photo Caption: Advocates from the New York Coalition of CDFIs at the New York State Assembly chambers, (from left to right) Denise Belser, Seedco Financial Services; Bob Radliff, Capital District Community Loan Fund; Amy Kramer, New York State Credit Union League; Rafael Morales, National Federation of CDCUs, Norah McVeigh, Nonprofit Finance Fund; and David Raynor, Leviticus Alternative Fund.