Investing to Foster Transformative Community Revitalization

Community Development Financial Institutions (CDFIs) were created by the Riegle Community Development and Regulatory Act of 1994 sparked by a number of social activists who were deeply concerned about the persistent and pervasive lack of financing capital available in distressed neighborhoods. Over the years, studies document how critical CDFI lending remains. A study conducted by The Federal Reserve Bank of Boston in 1992 found that people of color were 60 percent more likely to be turned down by a bank when applying for a mortgage than identical white applicants. The Treasury Department estimated that in 1993 the unmet credit needs in low-income communities was in excess of $15 billion and a 2014 Woodstock Institute study of business lending in Chicago showed that two-thirds of all commercial loan dollars went to more affluent communities in the City.  CDFIs provide critical financing for individuals and organizations to build housing, commercial space, clinics, and other needed infrastructure to revitalize distressed low income neighborhoods. This presentation will describe CDFIs and how they contribute to the creation of healthy communities through case study examples.