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News Now

Washington
Gambrell CDFI demand skyrockets
WASHINGTON (3/3/09)—The economic and political changes witnessed over the past year, and a serious drop in lending originations by some in the mainstream lending community, have caused demand for Community Development Financial Institutions (CDFIs) to “skyrocket,” according to CDFI Fund Director Donna Grambrell. Gambrell, addressing the 2009 CDFI Institute here Monday, said she believed the most “tangible recognition of the good work that the CDFI Industry has done over the past few years” is the inclusion of funding provisions in the new stimulus legislation. That bill, The American Recovery and Reinvestment Act of 2009, carries an additional $100 million to enhance the lending capacity of CDFIs in order to provide distressed communities with affordable financial services and products. The U.S. Treasury Department’s CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. CDFIs are financial intermediaries such as certain credit unions, banks, loan funds, venture capital funds, corporation-based lenders and microenterprise development loan funds. The Credit Union National Association (CUNA) is also working to address the credit gap that is occurring because of current economic conditions. CUNA has petitioned the U.S. Congress and the Obama administration to consider lifting the credit union member business lending cap. CUNA has noted that the 12.25%-of-assets cap has been in place only 10 years and was “arbitrarily set in response to banking lobbyists who wanted to restrain credit unions.” Without that ceiling, CUNA has estimate, credit unions could lend up to $10 billion in new business loans during the first year after the credit union business lending cap was eliminated.


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