CDFI Fund Awards $70 Million to Banks that Increased Investments in Severely Distressed Communities
Recipients Collectively Increased Lending and Services to Nation’s Most Distressed Areas by over $970 million
September 20, 2023
Washington, DC - The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced today $70 million in awards to 184 FDIC-insured banks, through the fiscal year (FY) 2023 round of the Bank Enterprise Award Program (BEA Program), for increasing investments to communities experiencing severe economic distress across the nation. In this award round, with funding combined from FY 2022 and FY 2023 appropriations, the CDFI Fund awarded the largest amount in total funds as well as the highest number of grants in the BEA Program history. All of the $70 million awarded will be reinvested into economically distressed communities and CDFIs, generating further economic opportunity.
Through the BEA Program, the CDFI Fund provides monetary awards to FDIC-insured depository institutions that successfully demonstrate an increase in their investments in CDFIs or in their own lending, investing, or service activities in the most distressed communities. BEA Distressed Communities are defined as those communities where at least 30% of residents have incomes that are less than the national poverty level and where the unemployment rate is at least 1.5 times the national unemployment rate. The CDFI Fund received 189 applications requesting $296.8 million in FY 2023 BEA Program round funding.
“The banks that received awards today are lending in the most highly distressed communities in the nation,” said CDFI Fund Acting Director Marcia Sigal. “They are providing critically needed loans and investments that other financial institutions will not make. Most notable in this round is that 145 banks provided $1.6 billion in loans to 4,300 businesses located in highly distressed communities and 112 banks provided $196.8 million in loans and investments to 30,855 residents in distressed communities.”
Collectively, during the 18-month assessment period for the FY 2023 BEA Program round, the 184 award recipients increased:
- loans and investments in distressed communities by $909.8 million;
- loans and deposits to CDFIs by $59.1 million; and
- the provision of financial services in distressed communities by $1.2 million.
Of the 184 depository institutions awarded funding, 98 committed to investing approximately $7.4 million, or 11% of total appropriated funds in this round, in Persistent Poverty Counties, exceeding the Congressional mandate of 10%. Persistent Poverty Counties, per Congressional guidance, are those counties that have experienced poverty rates of at least 20% over the past 30 years as measured by the 2016–2020 five-year data series available from the American Community Survey of the U.S. Census Bureau.