CDFI Fund Director Donna J. Gambrell Testifies before the House Financial Services Committee

March 10, 2010

Introduction

Good afternoon Chairman Frank, Ranking Member Bachus, and the distinguished Members of the House Financial Services Committee. My name is Donna J. Gambrell, and I am the Director of the U.S. Department of the Treasury’s Community Development Financial Institutions Fund-known as the CDFI Fund. I am truly honored to be here today to speak before you about the CDFI Fund and our role in helping to promote economic recovery in these challenging times.

Since its founding in 1994, the CDFI Fund has been committed to creating opportunity in disadvantaged communities. But in the past year there has been a growing recognition that the work of the CDFI Fund-and of the more than 800 certified CDFIs across the nation-is more important than ever. The financial crisis has only magnified the daunting challenges that low-income communities have long faced, and the CDFI Fund has been called upon to expand its work and to play a larger role in promoting economic recovery in communities that have been hardest hit by the recession.

I am pleased to report that the CDFI Fund has served with distinction in answering that call. In my testimony today I will outline the many ways in which, since the beginning of the recession, the CDFI Fund has worked to build small businesses and to create jobs in low-income communities, to develop affordable housing, and to expand the capacity of community-based social service organizations, such as community healthcare centers. I will also look at some of the new proposed initiatives we hope to undertake in the coming year to ensure that the recovery that is now under way will be shared by all.

Above all, I would like to assure the Members of this Committee that the CDFI Fund is more than prepared to continue answering the call. We are uniquely positioned to serve low-income and economically distressed communities. We have welcomed every new responsibility with which we have been entrusted in the past year, and we will welcome every new responsibility going forward. Just last week I spoke before the Congressional Black Caucus, which includes 10 Members of this Committee, to share with them the same important message: The CDFI Fund stands ready to play an even greater role in bringing economic opportunity to those who need it most.

CDFIs as Innovators

But CDFIs are not only focused on transforming lives and communities. They are also helping to transform the financial services industry by creating innovative financing tools to serve the unique needs of their clients. Let me give you just a few examples of the CDFI industry’s capacity for innovation.

The Montana Community Development Corporation (MCDC), a CDFI based in Missoula, is known for working on complex, multi-partner deals with “triple bottom line” impact. In one such deal, MCDC was the coordinator of a loan to a 100-year old dairy. The loan financed a $1.2 million methane digester that has enabled the dairy to recycle 100 percent of its waste into fertilizer, and has turned the dairy into an environmental leader. Eventually the dairy plans to sell Carbon Credits. MCDC led the project with its own financing as well as funds from two economic development groups, two banks, and four federal grant programs. Montana Senator Jon Tester recently recognized this effort as one of the leading triple bottom line economic development projects in the state.

The Reinvestment Fund (TRF) is another CDFI exploring ways to promote “green” values. The Philadelphia-based organization partnered with The Food Trust, a non-profit dedicated to making healthy food available to all, to develop and implement a sustainable energy model for supermarkets in underserved communities in Philadelphia. The initiative recently completed a small grocery store demonstration project with energy audits and a revenue tracking system, and is now working with TRF’s supermarket financing program to identify sites for large, neighborhood green supermarkets. As result of this initiative, TRF is able to help new and existing supermarkets identify and evaluate energy efficiency measures, such as high-efficiency lighting and refrigeration equipment, which can translate into savings.

One more example: the New Hampshire Community Loan Fund, in Concord, NH, was founded in 1984 to use capital and technical assistance to help people change their lives. The organization made its first loan to thirteen families facing eviction from their manufactured housing park when the park’s owner decided to sell the property to condominium developers. The loan enabled the families to buy the park and manage it as a cooperative. It also launched the Community Loan Fund’s Manufactured Housing Park Program, which, since 1984, has helped more than 5,000 families and individuals from 93 manufactured housing parks throughout New Hampshire to buy the land beneath their homes and convert their parks to cooperative ownership. The program offers an outstanding example of what can happen when a CDFI keeps its eyes open and works hard to develop innovative solutions to the problems in the communities it serves.

These are just three examples of the quality of innovation to be found at CDFIs. While these three organizations may seem exceptional, I can assure you that they are anything but rare. Our industry is filled with innovators who are dedicated to developing uncommon solutions to pressing economic problems. And I believe that this spirit of innovation can help to bring about an economic recovery that is strong and stable and shared by all Americans.

To read more of the article go to the CDFI website below:

http://www.cdfifund.gov/news_events/CDFI-2010-14-Director-Gambrell-Congressional-testimony.asp

Read more about Huls Dairy in the Missoulian Article below:

"Corvallis dairy earns top small business award from U.S. Chamber of Commerce"
http://missoulian.com/news/state-and-regional/article_72530f12-2bfd-11df-b752-001cc4c03286.html