Conference Highlights Growing Demand for Services as State Economy Falters
(May 28, 2009 – New York, NY) In the face of tightening credit and budget cuts, Community Development Financial Institutions (CDFIs) continue to lend and provide financial services to their communities; creating jobs, building affordable housing units, and supporting small businesses in urban and rural areas across New York State. This was the message when over 50 community lending and development organizations met at the annual New York Coalition of CDFIs Statewide Conference, held in Albany, NY on May 7, 2009. The conference was organized by the National Federation of Community Development Credit Unions (Federation), which has staffed and operated the coalition for over a decade.
|(Left to right) Ron Ehrenreich, CEO, Cooperative Federal CU (Syracuse, NY), Melanie Stern, New York Coalition of CDFIs Co-Coordinator (New York, NY); David Raynor, Executive Director, Leviticus 25:23 Alternative Fund (Elmsford, NY).
The event brought together more than 100 individuals representing nearly 50 organizations to hear about the financial “state of the state” and to discuss the impact of the economic downturn on low- and moderate-income communities. Attendees gathered to hear speakers from state agencies, as well as experts in the fields of microfinance, homeownership and foreclosure prevention.
Describing his appreciation for the work of CDFIs, New York Governor David Paterson sent a letter to the attendees, in which he confirmed the important role CDFIs play, stating that “New York relies upon diversity within its financial services industries. Community-based institutions have far-reaching effects on our overall economic growth and are recognized for the services they provide to New Yorkers of all income levels. CDFIs in New York continue to lead with vision and fresh ideas that help strengthen local and national economic structures.”
Jeffrey Metzler, Vice President of Empire State Development Corporation (ESD), the state agency responsible for supporting CDFIs elaborated on the expansion of funding for ESD’s economic development programs aimed at small businesses, including an additional $2.5 million, or a 170% increase, for the CDFI grant program aimed at small businesses.
While this increase in lending capital for small businesses is a welcomed development, the Coalition has been seeking more substantial support for the full range of activities CDFIs engage in. In 2007 the Coalition reached a major milestone when the New York State CDFI Fund was signed into law. This fund, to be administered by ESD, had strong bipartisan support in the state legislature, and went beyond anything in place that can provide support for the wide-ranging programs and activities that CDFIs engage in. However, since inception, not a single state dollar has been directed towards the new fund.
According to Federation President/CEO Cliff Rosenthal, “One of the Coalition’s major goals in 2010 is to ensure that there is a direct allocation for the New York State CDFI Fund in the state budget,” he said. “CDFIs are experts at leveraging public monies with private funds, and our research has shown that just a $15 million investment from the state, would create as much as $150 million in direct investments in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for economic development of individuals and small businesses, complementing ESD’s traditional large-scale economic development projects.”
State Support Vital to Leveraging Federal Funds
Carol Wayman, Legislative Director at CFED, discusses the American Recovery and Reinvestment Act and it's value to CDFIs.
Conference attendees also heard about federal opportunities for funding and support from Carol Wayman, Legislative Director of the Corporation for Enterprise Development in Washington D.C. Wayman told the audence that there is, “a dawning of a new day in Washington.” Wayman explained that entrepreneurship and microenterprise are being embraced by the President and Congressional leaders, and CDFIs are being recognized as critical to the nation’s economic growth and as an integral part of the solution to the country’s economic woes.
In addition, staff of the U.S. Treasury’s Federal CDFI fund announced that President Obama’s fiscal year (FY) 2010 budget requests $243.6 million for the CDFI Fund – more than doubling the $107 million appropriated for FY 2009. The request includes $113.6 million, for the CDFI Program to boost investments and other financial services in underserved communities and $80 million for the Capital Magnet Fund, a newly authorized program to increase capital investment for the development, preservation, rehabilitation, or purchase of affordable housing for low-, very low-, and extremely low-income families
New York State has the largest concentration of CDFIs in the country, with over 110 federally-certified community development credit unions, loan funds, community development banks, and affordable housing agencies ranging from multi-million dollar financial intermediaries to small microenterprise loans funds. These CDFIs have experienced an upsurge in demand for small business loans, mortgages, and personal loans as the economy has deteriorated. They have responded to this demand with mortgages that match a client’s ability to pay, anti-predatory personal loans and micro-financing for start-up and other small businesses. New York CDFIs currently have over $1 billion in loans currently outstanding to individuals and small-businesses across the state, and will have access to even more Federal money. But, despite these prospects, CDFIs will continue to additional more capital to address the needs of their communities.
Conference organizers hope Governor Paterson will see the need for more funding in coming years, and 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. “Greater support from the state will help position New York CDFIs to access increased Federal support, and it is essential that New York State CDFIs be prepared to tap into this important source of funds,” said Melanie Stern, Assistant Director of Community Development Investments at the Federation and one of the Coordinators of the CDFI Coalition, “CDFI investment will help jump-start local economies and go a long way towards helping struggling New Yorkers through the economic recession.”
The New York Coalition of CDFIs Statewide Conference was made possible thanks to major sponsorship from Capital One Bank and HSBC Bank, USA, with additional support from JP Morgan Chase Bank, Citibank and the Credit Union Association of New York. The New York Coalition of CDFIs is a program of the National Federation of Community Development Credit Unions.
Presentations from the conference can be accessed through the Coalition website, by clicking here.
For more information or to join the New York Coalition of CDFIs, please contact Coalition Coordinators, Melanie Stern (800.437.8711 x211 or firstname.lastname@example.org) or Dan Apfel (800 437-8711 x220 or email@example.com).
© 2009 National Federation of Community Development Credit Unions.