Re: Increased Funding for CDFI Fund
Mr. Tony Brown, Director
CDFI Fund
601 13th Street, NW
Washington, DC 20005
Dear Mr. Brown:
I am writing to express my support for increased funding for
the important work of the CDFI Fund, and my concern about recent changes in the
way the Fund operates.
As an investor with Domini Social Investments, I am
personally committed to supporting CDFIs around the country. The Domini Money
Market Account converts federally insured deposits into community development
loans through ShoreBank, the nation's oldest and largest community development
bank. The Domini Social Bond Fund is currently invested in 22 community
development banks, credit unions, and loan funds.
President Bush has proposed only $51 million for the CDFI
Fund for fiscal 2004, a decrease of 32% from fiscal 2003 and 57% since fiscal
2001. I urge you to support an appropriation of $80 million for the CDFI Fund
in the FY2004 VA, HUD, and Independent Agencies Appropriations bill. As you
know, funding for the CDFI Fund has wide-ranging positive effects. According to
National Community Capital, a national CDFI trade association, every $1 in CDFI
Fund financing ultimately leverages more than $24 in new investments in
businesses and affordable housing.
At the same time, I urge you to resist recent moves by the
management of the CDFI Fund away from the intent of Congress in creating the
program. Congress established the CDFI Fund to invest in and support CDFIs,
trusting them to act as intermediaries between underserved people and
communities and the mainstream financial system. This successful approach has
been replaced by an approach in which decisions are made in Washington, without
regard for the track record and market knowledge of CDFIs.
In particular, I am concerned about the following:
- The promotion of homeownership as a goal at the expense of
other needs such as affordable
rental and special
needs housing
- The "Growth Continuum" strategy, which assumes
that large CDFIs need money less than
smaller ones, and
places restrictions on access to certain programs that are based on asset size
- The focus on urban "Hot Zones" and changes in
certification criteria in a way that disadvantages
rural communities
- The move toward requiring CDFIs to segregate awards from
the Fund from their other funds,
adding to the
CDFIs' accounting and administrative burdens
Many thanks for your attention.
Yours Sincerely,
