As 2020 comes to a close and we prepare to shift focus to 2021, I would like to highlight the recent substantial and important impact of Community Development Financial Institutions (CDFIs) and provide some important insights into CDFI Fund activities and priorities for the coming year.
Over the course of fiscal year (FY) 2020, the CDFI Fund has worked diligently to deploy resources to CDFIs, Community Development Entities (CDEs), and mission-focused community development organizations to invest and lend in distressed and underserved areas across the nation. We awarded in excess of $548.9 million in monetary awards and loans, committed to guarantee $100.0 million in bonds, and allocated $3.5 billion in New Markets Tax Credits this year.
We know 2020 has been a challenging year that has required all of us to adjust to new circumstances and operate in different environments. Throughout 2020, the CDFI Fund has worked to meet these challenges by keeping pace with our 2020 application rounds and providing hands-on assistance to the network of CDFIs, CDEs, and community development organizations whenever possible. As we move into 2021, the CDFI Fund will continue to prioritize its efforts to provide critical community development finance resources in a timely and supportive manner while at the same time broadening the scope and impact of our assistance programs.
Providing COVID-19 Rapid Recovery Resources
The recently enacted Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (H.R. 133) contains roughly $900 billion in resources to help communities struggling against the economic impacts of the COVID-19 pandemic. The measure included $12 billion in supplemental appropriations to: 1) provide low-cost, long-term capital investments to Minority Depository Institutions (MDIs) and CDFIs that are depository institutions through a new Emergency Capital Investment Program (ECIP) administered by the Treasury Department; and 2) allocate $3 billion for the CDFI Fund to provide emergency support to CDFIs through two direct grant programs.
Of immediate concern, the $3 billion for the CDFI Fund specifically targets $1.25 billion for CDFIs to help their communities respond to the economic hardships created by the pandemic. The legislation requires that the CDFI Fund publish the funding notice for this new program within 60 days of enactment, or by February 25, 2021.
We have named this initiative the CDFI Rapid Response Program (RRP). These are funds that are intended to be deployed quickly to CDFIs to alleviate urgent community needs. The CDFI Fund is hard at work developing the materials and infrastructure needed for CDFIs to apply for the funds, which will be made available on a non-competitive and formula basis. We intend to apply the same diligence to disbursing the funding on an accelerated schedule as used for our Financial Assistance and Technical Assistance awards.
I specifically want to highlight that only Certified CDFIs will be eligible to apply for CDFI RRP funding. The CDFI Fund is in the process of resolving all pending CDFI Certification applications. Organizations that have questions regarding a pending CDFI Certification Application should submit an AMIS service request.
Uncertified organizations that are planning to apply for the CDFI Rapid Response Program, but have not yet submitted a CDFI Certification Application, may not receive a Certification determination in time to be eligible to apply for this program. CDFI Certification determinations may take up to 90 days from the date that a complete CDFI Certification Application has been received by the CDFI Fund. Depending on the level of analysis and review required, the time needed to provide a Certification determination can take longer.
We know that timelines between the CDFI RRP and the CDFI Fund’s other existing programs may cross, and in some cases may coincide. We are still dedicated to meeting all of our normal program obligations this fiscal year in addition to managing the CDFI RRP. For example, we currently have two different Requests for Public Comment out on the New Markets Tax Credit Program Application and the Capital Magnet Fund Application and Performance Report. However, we are also in the process of reviewing our program calendar for the fiscal year, and we fully intend to provide enough time for organizations to provide comments and submit applications while still allowing the CDFI Fund the time it needs to thoroughly evaluate applications and disburse awards.
In addition to the funding provided for the CDFI RRP, Congress also appropriated $1.75 billion to deliver COVID-19 recovery resources to CDFIs to expand financial activity in “low- or moderate-income minority communities and to minorities that have significant unmet capital or financial services needs.” And, of this amount, $1.2 billion was specifically set aside by Congress for awards to minority lending institutions, which is a new term established by the legislation for those CDFIs that predominantly serve minority communities and are either MDIs or meet other standards for accountability to minority populations as determined by the CDFI Fund.
It will take the CDFI Fund some time to develop this additional program and make these funds available. There is substantial work that remains to be done to develop the policies, procedures, and systems necessary to appropriately structure a funding blueprint and identify CDFIs that meet the minority lending institution definition, as well as develop accountability standards for these organizations.
Please stay tuned for additional information on these critical COVID-19 resources.
CDFI Fund Program Planning for FY 2021
The Consolidated Appropriations Act for FY 2021 provides $270 million in funding for the CDFI Fund’s discretionary assistance programs, an increase of $8 million above the FY 2020 level of appropriations. In addition, Congress also authorized a five-year extension of the New Markets Tax Credit Program (NMTC Program) through 2025 at $5 billion annually. The CDFI Fund is also working to deliver this funding through its existing assistance programs. During the first few months of the coming year, the CDFI Fund anticipates it will:
open the applications for the FY 2021 funding rounds of the Bank Enterprise Awards Program (BEA Program), CDFI Bond Guarantee Program (BG Program), CDFI Program, and Native American CDFI Assistance Program (NACA Program);
launch the inaugural round of the Small Dollar Loan Program (SDL Program); and
announce the FY 2020 Capital Magnet Fund (CMF) award recipients.
The CDFI Fund will also continue its work on the development and implementation of a revised CDFI Certification Application, Annual Certification and Data Collection Report, and a new Certification Transaction Level Report. However, given the time needed to review comments and implement final changes, we do not expect to implement the revised CDFI Certification Application and reporting procedures until late 2021, at the earliest.
In addition, the CDFI Fund looks forward to continuing its collaboration with the AmeriCorps on funding the first round of the Economic Mobility Corps (EMC) recipients. Applications to participate in EMC are due January 6, 2021, with the awards announcements scheduled for spring of 2021.
To receive the most up-to-date information on CDFI Fund activities, as well as information on all of our funding programs, sign up for updates on the CDFI Fund website here.
We hope you, your family and colleagues are keeping safe throughout the Holiday Season, and the CDFI Fund looks forward to productive and transformative New Year.
Jodie L. Harris
CDFI Fund Director