REPRESENTS OVER $500 MILLION IN INCREASED LENDING IN DISTRESSED COMMUNITIES
The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced today the application data for the fiscal year (FY) 2017 round of its Bank Enterprise Award Program (BEA Program). A total of 119 applications were received requesting awards of more than $131.7 million. The award request is over 5.7 times more than the $23 million available for this round. These applicants are headquartered in 23 states, and the District of Columbia.
The purpose of the BEA Program is to focus on the most severely economically distressed communities by providing an incentive for FDIC-insured financial institutions to increase their investments in those communities. Under the program, distressed communities are defined as census tracts where at least 30 percent of residents have incomes that are less than the national poverty level and where the unemployment rate is at least 1.5 times the national unemployment rate.
Applicants must demonstrate increased qualified activities in the form of investments in Community Development Financial Institutions (CDFIs) or in the applicants’ lending, investing, or financial service-related activities in these economically distressed communities. Award amounts are calculated as a percentage of the increase in qualified activities from one annual reporting period—known as the “baseline period”— to the next—known as the “assessment period.”
The CDFI Fund required FY 2017 applicants to report total lending, investment, and service activities for the annual baseline and assessment reporting periods for all activities that fell within the category for which an award is being sought, even if the applicant did not demonstrate an increase or is not seeking an award for a particular activity.
Collectively, during the one-year assessment period (January 1, 2016 – December 31, 2016), these 119 applicants reported lending, investment, and service activities totaling more than $1.4 billion. This represents an increase of nearly $522.8 million in additional lending, investing and service activities in CDFIs and severely economically distressed communities over the prior year. These applicants reported:
- an increase in their loans and investments in distressed communities of $491.6 million;
- an increase in their equity and equity-like loans and grants to CDFIs of $4.5 million;
- an increase in their loans, deposits, and technical assistance to CDFIs of $19.4 million; and
- an increase in the provision of financial services in distressed communities of $7.3 million.
Applications are currently under review and the CDFI Fund anticipates announcing awards this coming spring.