Today, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced nearly $22.8 million in awards to 113 banks for increasing investments benefiting economically distressed communities across the nation. The awards were made through the fiscal year (FY) 2017 round of the Bank Enterprise Award Program (BEA Program). The BEA Program is a performance-based grant program that provides monetary awards to FDIC-insured depository institutions that successfully demonstrate an increase in their investments in mission-driven lenders known as Community Development Financial Institutions (CDFIs), or in their own lending, investing, or service activities in highly distressed communities.
“These banks have not just increased their lending in economically distressed communities,” said CDFI Fund Director Annie Donovan. “They are lending in the most highly distressed communities where at least 30 percent of the population lives at or below the national poverty level and where the unemployment rate is at least 1.5 times the national average. I applaud their efforts to generate economic activity in some of the most underserved parts of the country.”
Collectively, during the one-year assessment period, these 113 depository institutions increased their loans and investments in distressed communities by $470.4 million; increased their loans, deposits, and technical assistance to CDFIs by $18.6 million; increased the provision of financial services in distressed communities by $7.3 million; and increased their equity and equity-like loans and grants to CDFIs by $2.5 million.
Furthering this impact, the nearly $22.8 million awarded today will be re-invested into highly distressed communities as well as CDFIs. Of the 113 depository institutions awarded, 76 have committed to deploying approximately $3.73 million, or 16.4 percent of award dollars, in Persistent Poverty Counties exceeding the Congressional mandate of 10 percent. The FY 2017 BEA Program award recipients were selected after a comprehensive review of 119 applications requesting $131.7 million in funding.
About the BEA Program
The Bank Enterprise Award Program (BEA Program) rewards FDIC-insured depository institutions for making investments in certified CDFIs as well as in the most distressed communities in the country. In order to receive an award, these banks and thrifts must demonstrate an increase in their investments to communities where at least 30 percent of the population lives at or below the national poverty level and where the unemployment rate is at least 1.5 times the national average. The BEA Program awards help offset some of the risks and/or costs associated with investing in these highly distressed communities and provide an incentive to increase their investments. The greater the loan increase, the greater the award. Since its inception in 1994, the BEA Program has awarded grants totaling over $470 million.
About the CDFI Fund
Since its creation in 1994, the CDFI Fund has awarded more than $3 billion to CDFIs, community development organizations, and financial institutions through: the BEA Program; the Capital Magnet Fund, the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Financial Education and Counseling Pilot Program; and the Native American CDFI Assistance Program. In addition, the CDFI Fund has allocated $54 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and closed guaranteed bonds in the amount of $1.36 billion through the CDFI Bond Guarantee Program.