Joint Letter to the Treasury on the CDFI Revised Certification Application

Dear Director Raghavan:

On behalf of the members of the undersigned national banking trades representing the full range of United States domestic banks and thrifts, we respectfully submit the enclosed comments on the Revised CDFI Certification Application, released December 7, 2023. Collectively, our CDFI bank members work to create economic opportunity in low- and moderate (LMI) income, high poverty, high unemployment communities.

CDFI banks comprise a significant portion of the CDFI industry as a whole. Today there are 196 CDFI certified banks and 160 certified bank holding companies. Thirty-two (32) of the 196 CDFI banks (16%) are also minority depository institutions (MDIs). In 2023, the Federal Reserve Bank of New York reported that CDFI banks held $117.7 billion of assets, roughly 26% of the then-estimated assets for the entire CDFI industry. Since then (as of Q1 2024), CDFI bank assets have grown approximately 5.25% to $124 billion dollars. In Q1 2024, the median asset size of a CDFI bank was $360 million dollars (average size $631 million), with the smallest bank just $26 million in assets, and the largest $7.9 billion in assets, well under the Federal Reserve’s asset-based threshold to be defined as a "community" bank.

The coming decade will see exceptional transformation as CDFI banks continue to leverage the capital from approximately $6.2 billion in equity investments via the U.S. Treasury’s Emergency Capital Investment Program (ECIP). Investments have also been made and are anticipated from private sources, as well as partnerships encouraged by provisions in the October 2023 joint agency Community Reinvestment Act (CRA) final rule, and the Environmental Protection Agency (EPA) Greenhouse Gas Reduction Fund (GGRF). CDFI banks are ready to deploy these funds, incorporating them into their operations in what is one of the federal government’s best market-based strategies for leveraging federal investments and private dollars to restore economic vitality.

On behalf of our members and the communities they serve, we respectfully urge the CDFI Fund to carefully consider our recommendations.

Download the joint comment letter to read the full text.