Last month, the CDFI Fund announced the selection of 102 FDIC-insured depository institutions to receive $18.6 million in fiscal year (FY) 2016 Bank Enterprise Award Program (BEA Program) grants.
The BEA Program recognizes that it takes financial institutions of different types and sizes to meet the various needs of communities across the nation. One of the primary objectives of the BEA Program is to encourage mainstream financial institutions to provide financial support to certified CDFIs. The BEA Program achieves this objective by prioritizing awards to applicants that provide loans and investments to certified CDFIs and in FY 2016, 59 BEA Award Recipients provided more than $61 million in qualified loans and investments to 56 certified CDFIs.
Each of these investments was beneficial to the CDFI that received it, and I’d like to tell you about one that I thought was creative and unique. In 2015, Regions Bank, a large FDIC-insured depository institution, donated two brick-and-mortar branch locations in rural Mississippi to HOPE Enterprises, a Certified CDFI credit union. In addition to donating the branches, Regions Bank also provided HOPE with a $500,000 grant to cover operating expenses which helped to ensure that HOPE’s presence in these communities would be a success.
The branches are located in highly distressed census tracts in the cities of Itta Bena and Moorhead, Mississippi. According to the 2006-2010 American Community Survey data: the Itta Bena branch is located in a census tract that has a poverty rate of 40.2 percent and an unemployment rate of over 15 percent; and the Moorhead branch is located in a census tract with an poverty rate of 48.4 percent and an unemployment rate of more than 24 percent.
This investment counted towards Regions Bank FY 2016 BEA Program Award of $172,199.00. More importantly, however, it provided the physical infrastructure needed for HOPE to expand into these highly distressed rural communities which will ensure that their customers will have access to affordable and safe financial products and services for many years to come. In June 2017, CDFI Fund Director Annie Donovan was able to visit these branches. Director Donovan noted that, “what I saw in the Mississippi Delta is consistent with our findings in the BEA Evaluation. Program participants are reaching deeply distressed communities.”
In nearly six years of working on the BEA Program, I cannot recall seeing a more unique example of a mainstream financial institution collaborating with a certified CDFI. I encourage others to think creatively about how they participate in the BEA Program.
David Fleites is a Senior Policy and Program Officer for the Bank Enterprise Award Program and New Markets Tax Credit Program