In mid-April, LIIF Chief Executive Officer Daniel A. Nissenbaum was honored to share insights on the critical role that CDFIs play when he attended an invite-only briefing with the U.S. Treasury Deputy Secretary Michael Faulkender and Deputy Assistant Secretary for Community and Economic Development Alexandria Smith. For three decades, CDFIs have created innovative financing tools to revitalize communities by leveraging public dollars with private capital.
There are currently 1,400+ certified CDFIs that operate in 5,900 locations across every state and in most U.S. territories. CDFIs are unique in that for every $1 dollar in federal funds they leverage an average of $8 in private deposits, loans and other investments to support lending to small businesses, affordable housing and other drivers of economic growth in underserved rural, urban and Native American markets. CDFIs collectively hold approximately $452 billion in total assets.
On March 14, President Trump issued an Executive Order (EO) directing several agencies, including the CDFI Fund, to limit their activities to only statutorily authorized activities. It should be noted that nearly all CDFI Fund programs are required by law. Immediately following the EO, Treasury Secretary Bessent acknowledged that fact in a statement.
This was a timely, intimate convening of private banks and select CDFIs, where Nissenbaum expressed the critical urgency of scaling CDFI activity due to a well-documented rise in the need to close gaps in the traditional financial market. This means the CDFI industry requires more federal seed capital. He stated, “The CDFI Fund grant programs allow LIIF and others to scale by offering access to conventional financial sources such as the Federal Home Loan Bank system, which has recently modified programs to broaden CDFI participation.”
The CDFI Fund, which catalyzes billions of dollars of private capital, is essential to allowing LIIF and the industry to fulfill their mission and deliver for investors. Additionally, the Fund’s CDFI Certification process is what our fiscal partners look to for validation of the sector’s work.
For every $1 we are awarded in grants by the CDFI Fund, we are able to borrow $4 of bank debt. When combined, and based on our strong lending and portfolio-management performance, we turn this into $12. That’s true impact in my book.
LIIF Chief Executive Officer Daniel A. Nissenbaum