Introduction
Good afternoon. Thank you for your kind introduction. It's nice to be here again with all of you at the National Bankers Association's 82nd Annual Convention.
When we all gathered last year in Miami, the downturn in the financial markets was on everybody's mind, and many of you wondered when the economy would recover. A year later the state of the economy is still a pressing issue for the banking industry, but we have made significant progress.
Since taking office, the Obama Administration has moved expeditiously to stabilize our economy, through initiatives such as the American Recovery and Reinvestment Act (Recovery Act), which has greatly enhanced the ability of the CDFI Fund to support financial institutions serving low-income communities. The Recovery Act has provided our programs with unprecedented funding levels, which have been deployed in record time and are already at work benefiting the communities most in need.
The role of minority and women-owned financial institutions is critical to bringing new economic opportunities to distressed communities. Just last Friday, I had the privilege of visiting Milwaukee, Wisconsin, where Legacy Bank was awarded a $1,000,000 financial assistance grant through the fiscal year (FY) 2009 round of the CDFI Program. Legacy Bank is the first bank in the United States founded by African-American women. Since opening its doors in 1999, it has achieved remarkable growth and success that cement its reputation as a minority bank of national importance.
What started as a dream of three women, Legacy Bank has now become a beacon of economic opportunity within the underserved communities of Milwaukee. In these trying economic times, communities are relying on these types of financial institutions to provide support, as traditional lenders have become more conservative in their interactions with the smaller and distressed loan customers.
As Director of the CDFI Fund, I am committed to increasing the number of CDFIs, specifically the number of Minority Depository Institutions (MDIs) seeking CDFI certification and utilizing all of the CDFI Fund's award programs.
This is truly an exciting time for the CDFI Fund, and for the entire community development finance industry. I appreciate and look forward to events such as these in order to raise awareness among members of the National Bankers Association, because of our similar missions.
Outreach Efforts
Over 50 percent of the National Banker's Association members are certified CDFIs. At the CDFI Fund, we are working hard to determine how we can serve the remaining subset of MDIs on their road to certification.
To this end, we have recently created a new Office of Training and Outreach within the CDFI Fund. This office has the responsibility of forging and strengthening working relationships with our federal partners and other key stakeholders. Given the current economic conditions, it's a task we take very seriously.
The CDFI Fund's new Capacity-Building Initiative will also offer training that is critical to CDFIs during the current economic conditions and beyond. A task order providing training on issues that are both timely and high-profile, such as affordable housing and business lending, portfolio management, risk assessment, foreclosure prevention, training in CDFI business processes, and assistance with liquidity and capitalization challenges, has been released. We are confident that this training will also enable MDIs to enhance their capability to become certified and to apply for the award programs offered by the CDFI Fund.
The CDFI Fund is also increasing our partnerships with other government agencies. Next week, the CDFI Fund and the Office of Thrift Supervision will be hosting a workshop in Atlanta, Georgia. The workshop is a targeted outreach effort designed to increase the number of certified, minority-owned CDFIs that apply for financial and technical assistance from the CDFI Fund. There will also be six additional CDFI Program workshops across the country over the coming months.
The CDFI Fund also conducts a series of conference calls regarding CDFI Certification. They allow potential certification applicants to ask questions of CDFI Fund staff members regarding the certification process. The next conference call will be on October 22nd, and a complete schedule can be found by visiting the CDFI Fund's homepage - www.cdfifund.gov.
I am also now turning to you, our partners within the National Bankers Association to help get the word out about our programs. Future CDFI Fund program applicants can greatly benefit from your experience. I encourage you to take the message of certification back to your communities and encourage participation. Let them know that the CDFI Fund is waiting to hear from them.
CDFI Fund Award Programs
The purpose of our redoubled outreach efforts is to encourage MDI participation in CDFI Fund programs. With FY 2009 behind us, we are looking ahead to the enormous possibilities the next year holds for our industry. The support we have received under the new Administration and the Recovery Act have made it possible for CDFIs to enhance activities within underserved communities. Some of our award rounds for 2010 are already underway, such as the CDFI Program that just opened, making $133 million in awards available. This year, we hope to receive applications from more minority-owned institutions, representing a diverse array of geographic areas.
I would like to take this opportunity to highlight the recent successes of MDIs during the FY 2009 round of the Bank Enterprise Award Program. In August we announced over $22 million in awards, and 25 awards representing approximately $12 million were awarded to MDIs.
Members of the National Bankers Association also make up a large percentage of the BEA awardees. Since the CDFI Fund's creation in 1994, National Bankers Association MDIs have received over $53 million through the Bank Enterprise Award Program. To those 21 MDIs who have not yet been certified, I encourage you to take advantage of this conference. Speak to everyone here and learn for yourself the many positive aspects of certification. We always stand ready to assist.
Success Stories
As we are here today to honor the success of MDIs, I would like to take a few moments to celebrate some of your many accomplishments, as there are many untold stories that help remind us of all that we have accomplished, and all that we are capable of doing.
Los Angeles is home to Broadway Federal Bank, an MDI founded in 1946, which just recently received certification from the CDFI Fund. Its founders noted that there just were not enough financial institutions providing conventional loans to minority populations, and they sought to correct this.
Today, Broadway employs almost 90 workers and manages more than 13,000 accounts. Their total assets are $438.7 million. The majority of the loans that Broadway makes are in those areas that have traditionally been underserved, the South Central and Mid-City areas of Los Angeles. Loans are almost evenly split between residential and commercial, with a large proportion going to the area's churches.
Broadway Federal also just received its first award through the CDFI Fund's BEA Program, totaling more than $696,000. Awards like this will help them to continue the partnerships they have created within their community.
Another recently certified CDFI-MDI that received funding through the 2009 round of the BEA Program is Tri-State Bank of Memphis, which serves low- to moderate-income minority communities in Tennessee, Mississippi and Arkansas. Memphis itself has a poverty rate higher than the national average, so it's easy to see how valued their services have become.
Founded in 1946, Tri-State Bank has endeavored to effect constructive change and to increase economic opportunities. They provide jobs and donate tens of thousands of dollars to scholarships and other community enterprises.
Tri-State employs more than 70 people and is responsible for more than $120 million in total assets. Their commitment to community is admirable, and we look forward to future collaborations.
Closing
CDFIs have proven themselves to be a valuable part of America's economic recovery. As we continue on this path, we remain committed to your success. Through our outreach programs and our continued push for certification, we encourage MDIs to take advantage of our awards programs, in order to help all Americans have access to the capital that they need, now more than ever. We appreciate your hard work and we look forward to continuing those relationships.
As always, we seek ways to increase minority participation in our programs, and we welcome your input on the process. There are many points of contact within the CDFI Fund, and I encourage you to take advantage of them.
Thank you.