The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced $26 million in awards to 158 FDIC-insured banks, through the fiscal year (FY) 2021 round of the Bank Enterprise Award Program (BEA Program), for increasing investments to communities experiencing severe economic distress across the nation. All of the $26 million awarded will be reinvested into economically distressed communities and CDFIs, generating further economic opportunity.
Through the BEA Program, the CDFI Fund provides monetary awards to FDIC-insured depository institutions that successfully demonstrate an increase in their investments in CDFIs or in their own lending, investing, or service activities in the most distressed communities. BEA Distressed Communities are defined as those communities where at least 30% of residents have incomes that are less than the national poverty level and where the unemployment rate is at least 1.5 times the national unemployment rate. The CDFI Fund received 161 applications requesting more than $288 million in FY 2021 BEA Program round funding.
“These banks are not just lending in the most highly distressed communities of the nation,” said CDFI Fund Director Jodie Harris. “They are providing critically needed loans and investments that many other financial institutions will not make. Most notable this year is the nearly 243% increase in qualified loans to businesses. 135 banks provided $1.66 billion in loans to 12,642 businesses located in highly distressed communities.”
Collectively, during the one-year assessment period for the FY 2021 BEA Program round, the 158 award recipients increased:
- loans and investments in distressed communities by $895.1 million;
- loans and deposits to CDFIs by $36.1 million;
- equity-like loans and grants to CDFIs by $1.29 million; and
- the provision of financial services in distressed communities by $183.4 million.
Of the 158 depository institutions awarded funding, 94 have committed to investing approximately $2.94 million, or 11.3% of total FY 2021 appropriated funds, in Persistent Poverty Counties, which exceeds the Congressional mandate of 10%. Persistent Poverty Counties, per Congressional guidance, are those counties that have experienced poverty rates of at least 20% over the past 30 years as measured by the 2011–2015 five-year data series available from the American Community Survey of the U.S. Census Bureau.
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