Our Work with CDFIs
A community development financial institution, or CDFI, is a specialized entity that provides lending, investments, and other financial services in economically distressed communities. The Minneapolis Fed’s Community Development office began partnering with CDFIs and CDFI support networks in the early 2000s. A major component of this work involves conducting educational and networking events where CDFIs and other community development organizations can meet and learn from experts in the field.
Partnership Tools for Community Development
One early example of these events is Partnership Tools for Community Development, a three-part series held in Minneapolis in the spring of 2001. The series covered the essentials of the CDFI program, New Markets Tax Credits, the Bank Enterprise Awards, and equity equivalent investments, or EQ2s. Later in the year, we took the Partnership Tools concept on the road to Fargo, N.D.
New Markets Tax Credit
In 2002 and 2004, we hosted New Markets Tax Credit (NMTC) Program training workshops that gave Ninth District community development organizations the opportunity to learn directly from CDFI Fund representatives, national CDFI coalition leaders, and other key players in the industry. The NMTC Program, which is administered by the U.S. Department of the Treasury’s CDFI Fund, promotes private sector capital investment in underserved areas by providing federal tax credits to individual or corporate taxpayers who make qualified investments in low-income communities.
Microenterprise Tools & Techniques
In Rochester, Minn., in November 2006, we cosponsored Microenterprise Tools & Techniques, a workshop for lenders and service providers on building the organizational, lending, and technical assistance capacity of microenterprise practitioners and organizations. The event drew national speakers and a diverse group of entrepreneurs and community development practitioners from across Minnesota.
Banks View of Community Development Investments
In November 2007, we brought together representatives from banks, government entities, financial regulatory agencies, and CDFIs to discuss the most prevalent forms of community development investments and how banks and regulators view those investments in light of the Community Reinvestment Act. Senior representatives from the Minneapolis Fed’s supervision and regulation area were onsite to lend their expertise.
Moving Toward a Sustainable Field
Partnerships are at the core of our work with CDFIs. In April 2008, Community Development, in partnership with local CDFIs and the Minnesota Department of Employment and Economic Development, organized Moving Toward a Sustainable Field, a two-day conference in St. Cloud, Minn., for local and national microenterprise practitioners, technical assistance providers, funders, and policymakers to explore ways to create strong, self-sufficient microenterprise programs and robust, diverse local economies.
Meeting with Federal Reserve Governor Elizabeth Duke
In April 2010, Community Development arranged for Federal Reserve Governor Elizabeth Duke to meet and visit with CEOs of CDFIs and banks from the Twin Cities area and outstate Minnesota. Participants provided the Governor with overviews of their organizations and work and then contributed to a larger discussion of efforts to address challenges entrepreneurs face in accessing capital.
Opportunity Finance Network Meetings
From 2011 on, Community Development staff and management have been active partners in organizing or presenting at national conferences and regional meetings of the Opportunity Finance Network (formerly known as National Community Capital Association), which is a national CDFI membership organization that promotes investment in low-income communities.
Minnesota CDFI Coalition Support
Provide direct support for the Minnesota CDFI Coalition as its members seek to achieve and build recognition of scale, scope, and impact of the CDFI industry among the general public and elected officials.
Ongoing: Training and Technical Assistance
In addition to convening conferences and workshops, Community Development provides targeted training and technical assistance to some CDFIs. These efforts include application reviews, assistance with finance and loan portfolio committees, and data analysis.