NY CDFIs Continue to Meet Demand Despite Economic Challenges & Tight Credit
(May 27, 2010 – New York, NY) In the face of tightening credit and state budget cuts, community development financial institutions (CDFIs) continue to provide affordable credit and financial services to urban and rural communities, creating jobs, expanding affordable housing, and supporting small businesses in main streets across New York State. This was the message when more than 100 community development leaders met at the annual New York Coalition of CDFIs Statewide Conference, held in Albany, May 17-18, 2010.
The conference, organized by the Federation, which has staffed and operated the coalition for over a decade, brought together representatives of New York-based CDFIs, political figures, state agencies and major banks to hear about the financial “state of the state,” the landscape for affordable housing development and small business lending, and the impact of the economic downturn on low- and moderate-income communities.
Participants at the event heard from state politicians, researchers and advocates, including State Senator Brian Foley of Long Island, Chairman of the Senate Banking Committee, who discussed the key role that CDFIs play in creating jobs and spurring economic recovery. In his remarks, Foley pointed out that in 2008 alone New York’s CDFIs had almost $2 billion in loans outstanding to affordable housing projects, non-profit facilities and small businesses in New York State. He noted that “according to research conducted by the U.S. Treasury Department, CDFIs are able to leverage state dollars at a ratio of 20 to 1,” he said. Senator Foley also took the opportunity to reiterate his support for a $15MM allocation for New York’s CDFIs, which the State Senate included in their March 17, 2010, Majority Resolution for a Fair and Responsible SFY10-11 Budget.”
The Coalition has been seeking state support for the full range of activities CDFIs engage in including loans for affordable housing, small businesses and non-profit and child care facilities as well as asset building programs and financial literacy and entrepreneurship training . 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 Empire State Development Corportion (ESDC), had strong bipartisan support in the state legislature, and provided authority to support community-based lenders above and beyond any other programs currently in place.
Coalition Coordinator Melanie Stern, Senior Program Officer at the Federation, stressed that one of the Coalition’s major goals is to ensure that a direct allocation for the New York State CDFI Fund remains in the governor’s budget. “CDFIs are experts at leveraging public monies with private funds, and our research has shown that a $15 million investment from the state would create as much as $150 million in direct investment in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for the economic development of individuals and small businesses, complementing ESDC’s traditional large-scale economic development projects.”
State Support Vital to Leveraging Federal Funds
Conference attendees also heard about federal opportunities for funding and support from Federation President/CEO, Clifford N. Rosenthal, one of the founders and former Chairman of the national CDFI Coalition. “This is new day in Washington,” Rosenthal explained, “We have an Administration and a Congress that understand the impact of our institutions and their potential to assist in the economic recovery that our country so desperately needs. In providing our industry with unprecedented levels of funding and support, the President and Congressional leaders, are recognizing CDFIs as critical to the nation’s economic growth and an integral part of the solution to the country’s economic woes.”
New York State has the largest concentration of CDFIs in the country, with more than 110 community development credit unions, loan funds, community development banks, and affordable housing lenders currently operating throughout the Empire State. These institutions range from small microenterprise loans funds to multi-million dollar financial intermediaries, but a common thread is that all of these organizations have experienced an upsurge in demand for small business loans, mortgages, and personal loans as the economy has deteriorated. CDFIs have responded to this demand with mortgages that match a client’s ability to pay, anti-predatory personal loans and micro-loans to assist start-up and other small businesses.
Organizers hope state legislators will see the need for increasing funding to the New York CDFI industry in the coming years. “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 New York CDFIs access increased funds from the U.S. Treasury Department’s CDFI Fund and other private sources,” explained Stern. “New York’s investment, coupled with federal and other funding sources will help jump-start local economies and go a long way towards helping struggling New Yorkers through the current recession.”
“It is essential that New York State CDFIs be prepared to tap into this important source of funds,and the New York CDFI Fund would provide the non-federal match that U.S. Treasury awards require” Stern added.
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, 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.
For more information or to join the New York Coalition of CDFIs, please click here, or contact Melanie Stern, Coalition Coordinator at email@example.com, or (800) 437-8711 x211.
© 2010 National Federation of Community Development Credit Unions.