CDFI Fund Announces Plan to Disburse Recovery Act Funding

[Community Development Banking List]

Original message from: j.vasiloff@verizon.net

Yesterday, the CDFI Fund announced its plan for awarding funds made
available through the American Recovery and Reinvestment Act (Recovery Act).

"This latest announcement that infuses some of our hardest hit communities
with much needed capital further demonstrates Treasury's commitment to
swift, efficient and effective implementation of the various components of
the Administration's comprehensive economic agenda," said Treasury Secretary
Geithner. "The Recovery Act is enabling more funds to flow to these
community-based lenders that are responsibly providing financing to help
small businesses, creating needed jobs and saving homes in low-income areas
across the country that have been hit hard by this economic crisis."

The Recovery Act provides an additional $90 million in CDFI Program
Financial Assistance (FA) and Technical Assistance (TA) awards; $8 million
for the Native American CDFI Assistance (NACA) program; and $3 billion in
additional tax credit authority for the New Markets Tax Credit program
(FY2008 and FY2009). The total FY2009 funding available for FA/TA is now
$145 million and for NACA it is $14.5 million. The CDFI Fund stated that it
plans to award all the Recovery Act funds in less than 90 days and will
begin disbursing the awards within 120 days.

"I commend Secretary Geithner and the Treasury Department for moving quickly
to implement these innovative programs to help underserved communities,"
said Vice President Biden. "They are exactly what the President and I had in
mind when we put forth the American Recovery and Reinvestment Act."

In brief, the CDFI Fund will re-open its 2009 CDFI Program and NACA Program
award rounds to enable additional applicants to apply and will offer current
applicants the opportunity to request larger awards. Applicants that did
apply under the initial FY 2009 award rounds will have the opportunity to
increase the amounts they requested in their applications to as much as $2
million under the CDFI Program and $750,000 under the NACA Program. As a
reminder, the Recovery Act waives the matching funds requirement as well as
the general requirement that no single awardee (or its affiliates) can
receive more than $5 million from the CDFI Fund over a three-year period.

For NMTC, the CDFI Fund will allocate $3 billion of tax credit authority as
follows: $1.5 billion to CDEs that applied for allocation authority under
the 2008 NMTC allocation round but did not receive a 2008 allocation; and
$1.5 billion to CDEs that apply for allocation authority under the 2009 NMTC
allocation round. Note this is in addition to the $3.5 billion already
allocated for FY2009.

If you have applied for the FY2009 round, the CDFI Fund may contact you for
additional information.

Reporting: Reporting requirements are still under development, but be
prepared that the requirements will be extensive! Please review the Office
of Management and Budget's memorandum regarding potential reporting
requirements:

http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf ('http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf')

To view the implementation plan, go to

http://www.cdfifund.gov/recovery/implementationplan.pdf ('http://www.cdfifund.gov/recovery/implementationplan.pdf')

New Program Announced

The CDFI Fund is also planning additional support to CDFIs and Native CDFIs.
"The CDFI Fund is pleased to announce additional support for CDFIs during
these critical times. While CDFIs are united by the challenges they face,
too often they lack the same level of access to resources they need to meet
these challenges. In the coming months, the CDFI Fund will unveil a new
capacity-building initiative that will provide high-level training,
outreach, and intensive, one-on-one technical assistance directly to CDFIs
and Native CDFIs."

Jennifer A. Vasiloff
Public Policy Consultant
Opportunity Finance Network
www.opportunityfinance.net
703-967-1338

[Community Development Banking List]

Original message from: r_pickett@hotmail.com


Yes, we should commend the administration for the swift manner that they are making funding available for the communities hardest hit by the current economic downturn. However, I believe we are overlooking a signficant aspect of the equation. Just as the banking industry has had it's bottom line severely impacted by the current economy, community development credit unions (CDCU) and many CDFI are struggling to persevere during this crisis. Their dilemma, however, is not due to greed, but to the growing unemployment in the communities they serve.



Community Development Credit Unions are "banking institutions" that are both depository and lending institutions but are democratically controlled. They represent long term commitments by low income residents to leverage collective weath for the betterment of their own communities. In most cases, they've operated historically almost exclusively with the limited wealth of their own residents, and often represent the only alternative to the predatory financial groups that permeate their communites. In our own case, we have operated for over 43 years accumulating approximately $8 million in farm worker money, representing one of only two such financial institutions in the entire San Joaquin Valley. In the decades that we have existed we have helped thousands of our own community with little outside support. Only $46,000 of our capital has come from the CDFI Fund. This distinction is important because the working poor will never develop unless they are vested in the development of their own communities. It also stands to reason that the poor can never escape poverty unless they have access to full banking services.



This unique sector of our finanicial structure is in the brink of collapse. While I applaud the efforts of Secretary Greithner, I believe that the problem will not be resolved without the same considerations that has been given to the traditional financial structure. Clearly saving these struggling financial institution must be a corporate part of any strategy to stablize our financial sector and of assuring that all sector of our society have acess to banking services. While infusion of funds into economic development activity during the economic crisis is ideal, the sustainability of our community based financial institutions must also be given similar consideration. There is little question, that if we truly desire to develop economically depressed communities, we must strengthen their institutions.



Raul Pickett, CEO

El Futuro Credit Union (CDFI)
182 N. Main St.
Porterville, California 93257
559 784 0324 Ext 105








From: j.vasiloff@verizon.net
To: communitydevelopmentbanking-l@cornell.edu
Subject: CDFI Fund Announces Plan to Disburse Recovery Act Funding
Date: Thu, 19 Mar 2009 09:19:12 -0400


Yesterday, the CDFI Fund announced its plan for awarding funds made available through the American Recovery and Reinvestment Act (Recovery Act).

"This latest announcement that infuses some of our hardest hit communities with much needed capital further demonstrates Treasury's commitment to swift, efficient and effective implementation of the various components of the Administration's comprehensive economic agenda,” said Treasury Secretary Geithner. "The Recovery Act is enabling more funds to flow to these community-based lenders that are responsibly providing financing to help small businesses, creating needed jobs and saving homes in low-income areas across the country that have been hit hard by this economic crisis."

The Recovery Act provides an additional $90 million in CDFI Program Financial Assistance (FA) and Technical Assistance (TA) awards; $8 million for the Native American CDFI Assistance (NACA) program; and $3 billion in additional tax credit authority for the New Markets Tax Credit program (FY2008 and FY2009). The total FY2009 funding available for FA/TA is now $145 million and for NACA it is $14.5 million. The CDFI Fund stated that it plans to award all the Recovery Act funds in less than 90 days and will begin disbursing the awards within 120 days.

"I commend Secretary Geithner and the Treasury Department for moving quickly to implement these innovative programs to help underserved communities," said Vice President Biden. "They are exactly what the President and I had in mind when we put forth the American Recovery and Reinvestment Act."

In brief, the CDFI Fund will re-open its 2009 CDFI Program and NACA Program award rounds to enable additional applicants to apply and will offer current applicants the opportunity to request larger awards. Applicants that did apply under the initial FY 2009 award rounds will have the opportunity to increase the amounts they requested in their applications to as much as $2 million under the CDFI Program and $750,000 under the NACA Program. As a reminder, the Recovery Act waives the matching funds requirement as well as the general requirement that no single awardee (or its affiliates) can receive more than $5 million from the CDFI Fund over a three-year period.

For NMTC, the CDFI Fund will allocate $3 billion of tax credit authority as follows: $1.5 billion to CDEs that applied for allocation authority under the 2008 NMTC allocation round but did not receive a 2008 allocation; and $1.5 billion to CDEs that apply for allocation authority under the 2009 NMTC allocation round. Note this is in addition to the $3.5 billion already allocated for FY2009.

If you have applied for the FY2009 round, the CDFI Fund may contact you for additional information.

Reporting: Reporting requirements are still under development, but be prepared that the requirements will be extensive! Please review the Office of Management and Budget’s memorandum regarding potential reporting requirements:

http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf ('http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf')

To view the implementation plan, go to

http://www.cdfifund.gov/recovery/implementationplan.pdf ('http://www.cdfifund.gov/recovery/implementationplan.pdf')

New Program Announced

The CDFI Fund is also planning additional support to CDFIs and Native CDFIs. “The CDFI Fund is pleased to announce additional support for CDFIs during these critical times. While CDFIs are united by the challenges they face, too often they lack the same level of access to resources they need to meet these challenges. In the coming months, the CDFI Fund will unveil a new capacity-building initiative that will provide high-level training, outreach, and intensive, one-on-one technical assistance directly to CDFIs and Native CDFIs.”

Jennifer A. Vasiloff
Public Policy Consultant
Opportunity Finance Network
www.opportunityfinance.net
703-967-1338




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