Our recent op-ed, Killing CDFIs would make a bad situation worse for businesses, was featured in an open letter from Representative Velazquez and Senator Shaheen to Steven Mnuchin, Secretary, Department of the Treasury, and Mick Mulvaney, Director, Office of Management of Budget. The letter detailed the concerns of the congresswomen and their constituents, specifically the concern for America’s small businesses that will be impacted by elimination of new program funding for CDFI’s in President Trump’s FY 2018 budget.
We are proud to stand alongside Representative Velazquez and Senator Shaheen in their support of CDFIs and America’s small businesses.
CDFIs play an important role in the financial services ecosystem. In addition to the consumers and small businesses that engage in lending with CDFIs, banks rely on the CRA credit they receive from regulators due to partnerships with CDFIs. CDFIs provide an important safety net in the overall banking system. Should CDFIs disappear, those organizations in line to take their market share do so without a directive to better the communities where the lending occurs. With little to no incentive to provide financing terms that recognize the importance of certain lending to the community, the borrower could face unfavorable terms and the overall community could feel the impact. The fact that CDFIs have succeeded and continue to grow proves their need to the financial services industry and their importance to the communities they serve.