Vice President Kamala Harris announced on Monday that more than $1.73 billion would go to 603 CDFIs across the country. These are specialized financial institutions such as loan funds, credit unions, banks and venture capital funds that commit to serving "underbanked" communities — those that may not have the credit or collateral to get financial backing from other traditional banks or lenders.
California received $152.3 million in awards for 57 CDFIs.
The awards are through the CDFI Equitable Recovery Program, which provided grants during the economic turmoil of the COVID-19 pandemic. Harris said these grants represent the largest CDFI grant program in history.
"These grant funds will be transformative for grantees that are building a more equitable, resilient economy, along with helping sustain our strong economic recovery," said Secretary of the Treasury Janet Yellen in the announcement. "These critical resources will allow mission-driven lenders to expand access to capital in financially underserved communities, which will help increase contributions to long-term economic growth."
Scott Andrews, president and CEO of Neighborhood National Bank, which received $3,718,258 from the fund, said this award "is a big deal." He added that this money will help the National City-based bank — the only CDFI bank in the county — increase loan activity to small businesses.
"There's a number of programs through the CDFI fund that the bank participates in — they aren't to this extent," Andrews said in a phone interview. "This dollar amount is extraordinary."
Many of the federally backed loans Neighborhood National Bank provides go to businesses hit hard by the pandemic. Their clients include minority-owned businesses like restaurants, gas stations and markets in Southeastern San Diego and Imperial County.
Accessity, a San Diego-based nonprofit lender, received $5,887,242 — the second largest award in California. Suzanne Carlson, director of marketing and communication for Accessity said in an email that most of the funds will provide direct access to capital for eligible minority-owned or controlled businesses in Southern California.
In addition to lending, Accessity connects entrepreneurs of color, women, immigrant, and low-to-moderate income entrepreneurs to free business and financial coaching services. Carlson added that a portion of the award money will help the organization grow its operational capacity to support borrowers and equitable recovery activities in the community.
Andrew Phillips, president and CEO of Civic Communities, said the nonprofit lender received $500,000, which will go toward small businesses and promote affordable housing. The award will help the organization grow its small business lending program.
Phillips said funds may also go toward loans to housing developers tackling San Diego's housing needs by building low-income and middle-income homes.
"We are excited by the opportunities these new funds provide us and our neighborhoods," Phillips said in an email.
CDFI investment is aimed at regions meeting the following criteria: a population poverty rate of at least 20 percent; an unemployment rate 1.5 times the national average; a median family income (MFI) at or below 80 percent of the greater of either the metropolitan or national metropolitan MFI, or which is wholly located within an Empowerment Zone or Enterprise Community.
To see what regions in San Diego County are eligible for CDFI funding through these specialized institutions, check this interactive map.
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