Community Development Policy

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LIIF works to advance the community capital industry nationwide and helps to mobilize public resources for distressed communities across the country. Our community development agenda has two primary goals:

  • Protect mainstay community capital programs, such as the US Department of the Treasury’s CDFI Fund programs, New Markets Tax Credits, and the Community Reinvestment Act
  • Support innovative, new initiatives to grow the community development field

LIIF works in partnership with community development organizations and coalitions to advance this mission. We are a member of the New Markets Tax Credit Coalition Board, the CDFI Coalition, and Opportunity Finance Network.

New Markets Tax Credit

The NMTC is a model public-private partnership that attracts capital to low-income communities by providing private investors with a federal tax credit for investments made in businesses or economic development projects located in distressed communities. Since 2003, the NMTC has delivered more than $100 billion in total project financing to nearly 6,000 projects and businesses, creating over one million jobs. For every one dollar in foregone federal revenue, an additional $8 in private capital is generated.The current availability of NMTCs meets only a fraction of the demand. In 2018, 214 CDEs applied for more than $14.8 billion in NMTCs; the CDFI Fund was able to award 73 CDEs with a total of $3.5 billion in Credit authority.

Despite its tremendous success, the NMTC is not a permanent part of the tax code. In 2019, Congress passed a one-year extension of the NMTC at $5 billion – a $1.5 billion increase over FY 2019 and the program’s first allocation increase in over a decade. However, the NMTC is set to expire at the end of 2020 unless Congress acts. The New Markets Tax Credit Extension Act of 2019 (H.R. 1680 and S. 750), introduced by Senators Ben Cardin (D-MD) and Roy Blunt (R-MO) and Representatives Terri Sewell (D-AL) and Tom Reed (R-NY), would make the NMTC a permanent part of the tax code and index the credit to inflation. LIIF strongly urges Congress to enact the bipartisan New Markets Tax Credit Extension Act of 2019 and provide much-needed certainty to investors, CDEs, and low-income communities.


The Department of Treasury’s CDFI Fund administers a range of innovative programs that strengthen CDFIs’ ability to provide financial products and services in underserved markets. CDFIs leverage over $12 in private capital to every $1 in federal support, providing an efficient and market-based approach to supporting economically disadvantaged communities.Congress funded the CDFI Fund at a record $262 million in FY 2020, an increase of $12 million over FY 2019 levels. This is a tremendous advocacy success and will allow CDFIs to leverage even more private capital for communities. Yet there is still drastically more demand for resources than the CDFI Fund has available, LIIF joins our partners in urging Congress to increase annual CDFI Fund appropriations to $300 million.

Healthy Food Financing Initiative

Increased local availability of fresh, healthy food has been linked to families making more nutritious food choices and maintaining better health. LIIF supports local, state and federal policies, such as the national Healthy Foods Financing Initiative (HFFI), that support food access for low-income communities. To date, LIIF has been awarded $15 million in HFFI funds from the CDFI Fund to support healthy food retail and community projects.

HFFI is currently funded at $22 million annually. LIIF advocates for an increase in HFFI funding as part of the broader $300 million appropriation request for the CDFI Fund.

Disability Grants

The CDFI Program offers both Financial Assistance (FA) and Technical Assistance (TA) awards to CDFIs that can be used to finance a variety of projects, including CDFI assistance to persons with disabilities. These competitive awards enhance CDFIs’ ability to serve persons with disabilities.

Congress increased the set-aside for Disability Grants from $3 million to $4 million in FY 2020 appropriations. LIIF is pleased that this set-aside will allow CDFIs to serve more persons with disabilities.

Community Reinvestment Act

The Community Reinvestment Act (CRA) was enacted in 1977 to encourage banks and other depository institutions to meet the credit needs of the communities in which they operate. The law requires financial institutions to lend and invest where they accept deposits, including in low- and moderate-income (LMI) communities.CRA has been invaluable to communities and individuals over the more than 40 years since it was enacted. The National Community Reinvestment Coalition (NCRC) estimates that banks have made $1 trillion in community development loans since 1996, supporting affordable housing and community development projects benefiting LMI communities and individuals.

In 2018, the Office of the Comptroller of the Currency (OCC) released an advance notice of proposed rulemaking (ANPR) detailing potential changes to the rules and regulations surrounding the law. LIIF submitted a comment letter to the OCC in November 2018 articulating the importance of strong CRA regulations that build on the successes in the community development industry over the past few decades.

In December 2019, the OCC and Federal Deposit Insurance Corporation (FDIC) issued a joint notice of proposed rulemaking (NPR) on changes to CRA regulations. Notably the Federal Reserve, the third federal banking regulator, did not join the OCC and FDIC in issuing the NPR. In response to the NPR, LIIF CEO Dan Nissenbaum released a statement emphasizing LIIF’s focus on maintaining CRA regulations that incent the most impactful community development activities.

Opportunity Zones

Opportunity Zones are a new tax incentive designed to spur long-term capital in designated low-income communities. There are approximately 8,700 designated Qualified Opportunity Zones nationwide in which investors can receive a series of tax benefits for investing their capital gains.LIIF has been engaged in policy conversations around the newly created Opportunity Zones tax incentive. A top policy priority for LIIF is ensuring that there are strong data collection and reporting requirements included in the rules and regulations surrounding this new tax incentive. On May 31, 2019, we submitted a comment letter to the Treasury Department enthusiastically supporting strong reporting requirements in Opportunity Zones.