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- Support increased funding for the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund). It is strongly recommended that the CDFI Fund receive a minimum of $250 million per year.
Read more recommendations - Within the CDFI Fund, a research and development program should be established. This “innovation bank” would function as a new source for product creation and system change to lead promising ideas and products to scale.
Read more recommendationsThe opportunity finance industry has been the leader in sustainable innovation for our nation's poorest communities for decades, but it has the potential to facilitate even greater levels of change. It is time to put resources into research and development for community development financial institutions (CDFIs). - Congress should make the New Markets Tax Credit (NMTC) permanent. Although extending the NMTC one year at a time, as Congress has since 2006, has been helpful, the lack of long-term availability of the credit makes it extremely difficult for organizations and developers to plan. Making the NMTC permanent would help alleviate this problem.
Read more recommendationsStatutory changes that eliminate the structural disadvantages faced by certified CDFIs should be made part of the program. - Congress should make statutory changes that enhance the ability of certified CDFIs to compete for the NMTC. Certified CDFIs receiving allocations have successfully demonstrated their ability to raise capital and deploy it in low-income communities.
Read more recommendations - Increase funding for the U.S. Small Business Administration’s Microloan Program to at least $20 million for technical assistance and grant it the budget authority to provide $31 million for direct SBA Microloans.
Read more recommendations - Amend the CDFI Fund regulations for CDFI certification standards to reestablish the importance of the primary mission and financing entity tests. In recent years, CDFI Fund regulations have relaxed the rules to enable organizations with affiliates or subsidiaries that do not have a principal focus on distressed markets to qualify as CDFIs.
Read more recommendationsIn addition, the requirement that a CDFIs predominant business activity be financing has been relaxed. These tests are critical to ensuring that only organizations with a deep commitment to distressed communities and a strong focus on delivering financial products qualify for scarce federal resources. - The U.S. Department of the Treasury and the Internal Revenue Service should amend regulations to include certified CDFIs among the entities deemed eligible to be qualified active low-income community businesses. That would enable certified CDFIs to receive qualified low-income community investments.
Read more recommendations - Make CDFIs eligible applicants for all federal community development grant and loan programs.
Read more recommendations - A positive obligation to serve low-income communities and people should be extended to all portions of the financial services industry that compete with banks and thrifts through the Community Reinvestment Act. That obligation includes not only credit unions and mortgage bankers but also other entities that provide credit, transaction services, and savings and investment vehicles.
Read more recommendationsEvaluations should include holding companies and all affiliates.