Proposal eliminates resources for low-income communities
Community Development Financial Institutions Fund is a critical economic driver for Colorado
In response to the Trump Administration's proposal to eliminate funding for the U.S. Treasury Department's Community Development Financial Institutions Fund, Colorado Enterprise Fund's president and CEO, Ceyl Prinster released a statement.
"Colorado Enterprise Fund is deeply disappointed that the Trump Administration has proposed a budget for both fiscal years 2017 and 2018 that all but eliminates federal support for the U.S. Treasury Department’s CDFI Fund by slashing its grant program," Prinster says, explaining that the fund is a critical resource for economic growth for low-income communities, both in Colorado and beyond.
Some fear the elimination of this funding structure will deprive low-income communities billions of dollars in financial products and services. According to the national CDFI Coalition, CDFIs leveraged federal dollars by as much as 12 to 1 with private investment from banks, foundations and other funding partners.
CEF was the first lending organization in Colorado certified by the CDFI Fund in 1996 to serve low-income and minority populations. During the last two decades, CEF has leveraged $8.5 million in DCFI Fund Awards, loaning out more than $58 million and financing close to 2,000 small businesses.
More than 83 percent of CEF's loans have helped businesses owned by women, minorities and low-income people, and have created and retained more than 17,000 jobs.
In Colorado, 15 CDFIs have replaced $40.3 million in direct CDFI Fund Awards, leveraged alongside other capital. Total economic impact of these grants in the state is estimated to be roughly $480 million, supporting businesses, affordable housing and nonprofit community projects.
"CDFIs are mission-driven financial institutions that provide affordable credit, technical assistance, capital and financial services to residents and businesses in capital-starved communities," Prinster says.
She says that the goal of CDFIs is to include customers in the mainstream economy as bankable business, homeowners and individuals.
Nationally, there are more than 950 certified CDFIs. Last year, CDFI Fund Awards financed more than 11,000 businesses, and built more than 33,000 affordable housing units.
The CDFI Fund costs each American just 79 cents per year to provide loans that create tens of thousands of jobs, businesses and affordable places for people to live. Since its inception, the CDFI Fund has received bipartisan presidential and Congressional support. In a letter dated March 14, 2017, all of the major banking associations, including the American Bankers Association, voiced their support to Congress for the continued funding of the CDFI Fund at the $250 million annual level. We now look to Congress to maintain this vital funding in its annual appropriations process and urge our partners to submit letters of support to their local representatives.”