Treasury Releases CDFI Action Plan

The Department of Treasury released its implementation plan for the funds provided by the American Recovery and Reinvestment Act of 2009 (the Recovery Act) and administered by the Community Development Financial Institutions Fund (CDFI).

The Recovery Act waives the matching fund requirement from non-Federal resources and the general requirement that no single awardee can receive more than $5 million from the fund over a five-year period. As a result, 2009 awards will be made in the form of grants versus matching funds.

The CDFI fund will provide approximately $145 million in financial assistance awards in 2009. The awards will increase to up to $2 million under the financial assistance component. Previously the awards were capped at $1 million. It is anticipated that more awardees will receive assistance as well. Applicants with high scores pursuant to eh FY 2009 Notice of Funding Availability (NOFA) but not funded due to fiscal constraints, will receive assistance. The FY 2009 CDFI application round is currently closed but will be reopened to those interested in applying. A NOFA will be published in the next 30 days with the appropriate details.

Two award announcements will be made to accommodate the flow of Recovery funds and the additional applications. The first will occur in June when the Recovery dollars will be awarded to the most highly rated applications. The second awards will be announced in September to the most highly rated applicants taken from the pool which includes those which submitted applications in response to the NOFA and those entities which did not receive funding during the first round.

Additional New Market Tax Credit (NMTC) authority will made available to 30 organizations which applied under the 2008 round but were not funded even though they were highly rated. The awards are expected to be announced in May. In the current application round, the CDFI Fund anticipates making 100 awards to Community Development Entities (CDEs) totaling $5 billion.

CRA Not Responsible for Mortgage Crisis

In a statement presented before the United States Commission on Civil Rights, Barry Wides, Deputy Comptroller of Community Affairs at the Office of the Comptroller of the Currency (OCC) said the Community Reinvestment Act (CRA) is not “the culprit behind abuses in subprime mortgage lending nor in the broader credit quality issues in the marketplace.”

Wides delivered his testimony in a hearing before the commission on March 20 in Washington, DC. Wides said the OCC and other Federal banking regulatory agencies have looked at this issue in detail by analyzing independent studies and comprehensive loan data sets. He said CRA loans appear to perform as well or better than other types of subprime loans. He also said a vast majority of the subprime loans were not originated by national banks supervised by the OCC.

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