U.S. Department of the Treasury

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WASHINGTON - Thank you to the CDFI Fund team and those at Treasury who have worked so hard to put this important event together. 

 

Let me say how much we appreciate everyone for joining us today to celebrate this 20th anniversary of the CDFI Fund.  We have many people here who have been crucial to the CDFI Fund’s success over the past two decades, including former Secretary Bob Rubin and former National Economic Council Director Gene Sperling.  By supporting the CDFI Fund and the hundreds of community development financial institutions that work hand in hand with the program, you have helped reinvigorate communities across the country—struggling manufacturing towns, poor rural areas, economically torn urban centers, and blighted suburban neighborhoods.  I know I speak for everyone here when I say America is better off today because of this hard work and dedication.

 

In particular, I want to mention a few people who could not join our event today.  The late Secretary Lloyd Bentsen, a great leader who fought to get the legislation creating the CDFI Fund passed and whose legacy will forever be entwined with the achievements of this program.  Former Treasury Secretary Larry Summers, who could not be here today, but was a fierce champion of the CDFI Fund and worked on a bipartisan basis with then-Speaker Dennis Hastert to establish the New Markets Tax Credit Program in the final months of the Clinton Administration.  And President Clinton—who also could not be with us—but is, I know, as proud as anyone to see the CDFI Fund reach this milestone. 

 

Of course, it was President Clinton who began fighting for the creation of the CDFI Fund while he was still governor of Arkansas.  He believed in the fundamental importance of bringing mainstream economics to underprivileged neighborhoods and to undercapitalized Americans.  And his administration—which I had the good fortune to serve in—was determined to help lift communities by building markets and unleashing free enterprise.  That is, driving local investment, expanding business activity, and connecting workers with education, skills, and jobs.  The administration created empowerment zones, AmeriCorps, and the CDFI Fund. 

 

When the CDFI Fund was created, it was rooted in the simple yet powerful idea that you could transform communities by providing them with something they did not have access to: capital.  And by bridging that gulf—businesses would grow, workers would get jobs, and families would prosper.  This would ultimately unlock a virtuous cycle that would lead to more businesses, more jobs, and more progress.

 

Twenty years ago, when President Clinton signed the law that set the CDFI Fund into motion, he said, “I have dreamed of this day for a long time…This bill is not about bureaucracies, and it is certainly not about distributing handouts; it is about new opportunity for people to assume responsibility to make good lives for themselves by making the private sector work in places where it had not gone before.”

 

Because of the capital it unlocks, the CDFI Fund has made an enormous difference, from housing, health care, and business creation to job training, real estate development, and business services.  The truth is, the CDFI Fund is making America stronger, one community at a time. 

 

I have seen the importance of the CDFI Fund firsthand, and over the past few weeks, I visited two places that are sustaining communities because of the CDFI Fund.  

 

At Bread for the City here in DC, I saw how the CDFI Fund helps give people a second chance.  Bread for the City provides food, clothing, medical care, and legal assistance to those in need, and the center I visited has received more than $6 million in investments for construction and renovations through the CDFI Fund’s New Markets Tax Credit Program.

 

And at Playa Vista Job Opportunities and Business Services in Los Angeles, I saw how the CDFI Fund can help change outcomes for workers.  PVJOBS [pronounced P-V Jobs] helps men and women gain skills and get hired.  And thanks to a $737,000 loan from Clearinghouse CDFI, PVJOBS renovated its headquarters to improve the services it provides to the community.

 

What PVJOBS and Bread for the City illustrate is that the CDFI Fund has had a profound impact on our nation.  From the start, the CDFI Fund was designed to confront entrenched challenges of distress and poverty, not from the top down, but from the grassroots up, by strengthening local lending and investing through community development financial institutions. 

 

In the 20 years since it was created, the CDFI Fund has awarded more than $2 billion to CDFIs all over the country.  These institutions have used that money to provide capital to businesses and organizations, which has helped improve communities and grow local economies.  And because of the CDFI Fund, financing and investing at the local level has been transformed.  When the first CDFI Fund awards were made, there were only 173 certified community development financial institutions in the United States.  Today, there are nearly 900 certified CDFIs.  And in many cases, these CDFIs are the only sources of capital for borrowers in the communities they serve.

 

Now, President Obama has been committed to building on the solid foundation that has been laid.  In fact, when he came into office and was faced with an economy hurtling toward a second Great Depression, President Obama turned to the CDFI Fund as part of his effective plan to stabilize and rebuild the economy.  Because of the vitality of our nation’s community development financial institutions, the CDFI Fund could reach hard-hit areas quickly and efficiently, and so the CDFI Fund was given a boost.  During the depths of the crisis, the financial and technical assistance awards distributed under the CDFI Program more than doubled and there was a significant expansion of the New Markets Tax Credit Program. 

 

Keeping the CDFI Fund strong has been a critical component of President Obama’s strategy to rebuild the middle class, reward hard work, and expand opportunity.  Like the President’s initiatives to lower taxes for 98 percent of all Americans, increase the Earned Income Tax Credit, create Promise Zones, and establish manufacturing innovation institutes, the CDFI Fund knocks down barriers and gives hard working Americans a shot at success.

 

A central part of this economic plan has been to provide capital to small businesses.  In 2010, President Obama signed into law the Small Business Jobs Act, which, among other things, created the State Small Business Credit Initiative.  This program includes powerful incentives so that every dollar that is invested in state lending programs for small businesses is matched by $10 from the private sector.  And today we released a new report that shows that over the past three years, the program has helped approximately 8,500 businesses and, according to business owners, SSBCI will help them create or save nearly 100,000 jobs.

 

Similarly, the CDFI Fund’s New Markets Tax Credit Program uses tax incentives to channel private investment in businesses, organizations, and projects in distressed areas.  Every year, investor demand for these credits exceeds our available authority, and the competition these incentives spark helps spur investment.  Since this program was started in 2000, more than 200,000 jobs have been created through this innovative public-private partnership, and it has been instrumental in helping start clean energy companies in former coal towns, health care centers in Native American communities, and grocery stores in areas known as “food deserts.” 

 

We are proud of what the CDFI Fund has achieved.  But this event today is not just a celebration of the past, it is also a commitment to the future.  We are here because we want to take the accomplishments of the past 20 years and push forward to meet the challenges ahead.  And to keep doing our part, this administration has moved on a variety of fronts to guarantee that the CDFI Fund is successful today, tomorrow, and far down the road. 

 

For instance, the CDFI Fund took a series of steps recently to improve its effectiveness.  A sweeping recertification initiative was completed so any CDFI with a certification three years old or older had to be recertified.  And last year, the CDFI Fund commissioned the first-ever independent review of the CDFI Program.  This review will help us refine the CDFI Program, build on its strengths, and zero in on ways we can serve communities better.

 

At the same time, the CDFI Fund recently put in place a new program—the CDFI Bond Guarantee Program—to specifically help CDFIs provide long-term, fixed-rate loans, including mortgages, in low-income and underserved areas.  The Bond Guarantee Program was created to jump start economic development projects such as multi-family rental properties, charter schools, and health care centers, and over the last two years, this program has issued $525 million in new bonds. 

 

All the while, we continue to bolster community development financial institutions through our Capacity Building Initiative, which provides resources, training, and technical assistance to CDFIs.

 

Let me close by pointing out that we recognize that government cannot solve all of our problems—not when our economies are so diverse, our communities so varied, and our challenges so great.  But government has a powerful role to play, and it can create the conditions so more Americans have a fair chance to thrive in this great country of ours.  And by working together—government, private sector, nonprofits, faith institutions, and community leaders—we can change the odds, we can overcome dim expectations, and we can make America stronger. 

 

President Obama once said, “If poverty is a disease that infects an entire community in the form of unemployment and violence, failing schools and broken homes, then we can’t just treat those symptoms in isolation.  We have to heal that entire community.  And we have to focus on what actually works.”

 

That is what the CDFI Fund does.  That is what it has done for the last 20 years.  And that is what it will continue to do—thanks to everyone here—for the next 20 years.

 

And with that, I would like to introduce our keynote speaker, Bob Rubin, the 70th Secretary of the Treasury.  As many of you know, Bob was not only the Director of the National Economic Council when the legislation creating the CDFI Fund was passed, he was deeply involved in the program’s creation.  He was also a strong supporter of the CDFI Fund as Secretary and a staunch advocate for its success when he returned to the private sector.  Please join me in welcoming Bob back to Treasury.

 

Thank you.