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Federal Reserve governor praises CDFIs and urges continued support
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Summary
A Federal Reserve governor told the Opportunity Finance Network that community development financial institutions (CDFIs) are essential to extending credit and services in underserved rural, urban and tribal communities, citing examples from the Mississippi Delta to Atlanta and urging continued partnership and investment.
A Federal Reserve governor onstage in a remote address to the Opportunity Finance Network on Friday praised community development financial institutions (CDFIs) for widening access to credit in communities mainstream finance often misses and urged continued support for their work.
The governor said CDFIs were created to ‘‘get credit flowing into places where mainstream finance has not always reached’’ and called their mix of flexible underwriting, tailored lending and deep community relationships a model that sustains local economies. The governor noted personal involvement in early federal efforts to support CDFIs, saying they helped ‘‘stand up the CDFI Fund, strengthen the Community Reinvestment Act, and launch the New Markets Tax Credit’’ while at the Treasury Department.
Why it matters: CDFIs provide loans and technical assistance to small businesses, support affordable housing and community facilities, and often operate where bank branches have closed. The governor highlighted the federal programs and policies that helped build the sector and said demand for CDFI services continues to grow.
The governor said they see CDFIs operating nationwide, including in rural areas such as the Mississippi Delta, in major cities such as Atlanta and in tribal communities. Citing work by the Federal Reserve’s Center for Indian Country Development, the governor listed specific, culturally tailored products CDFIs have developed — seasonal payment plans for fishermen and loggers, accepting tribal distribution payments as collateral and creating land buyback loan products — and relayed a Native CDFI leader’s description of that approach as ‘‘blending culture with finance.’’
The governor also credited CDFIs with responding quickly in economic downturns, saying they ‘‘were often the first to step up’’ during the foreclosure crisis by maintaining lending and helping homeowners, and that during the COVID-19 pandemic CDFIs again ‘‘acted as first responders, rapidly delivering relief to small businesses.’’
The address framed CDFIs’ work as central to neighborhood revitalization — including affordable housing and day care centers — and to helping small businesses access capital and business-development resources. The governor closed by urging continued partnership to ensure ‘‘opportunity reaches every community’’ and thanked attendees for their leadership.
The remarks did not announce new federal actions or funding; the governor reviewed past policy work and underscored the sector’s ongoing demand and role in future economic inclusion efforts.
