Summer 2000, Volume 3, Number 3 Inside Secretary Summers ... · Summer 2000 -CDFI Fund Quarterly Effective immediately, the CDFI Fund will institute a change in the number of bank

Inside 2 • Director’s Viewpoint

3 • Staff Updates;• FY 2001 Program

Calendar;• Policy Change Alert

4 • Native AmericanLending Study/ActionPlan

5 • Information Sessions

9 • New Core and Interme-diary Applications

11 • Interagency Workgroupon Microenterprise

12 • Certification Update

13 • Director Lazar visitsLegacy Bank

Summer 2000, Volume 3, Number 3

US Department of the Treasury

Community DevelopmentFinancial Institutions Fund601 Thirteenth Street, NWWashington, D.C. 20005

Secretary Summers Visits CreditUnion In San Francisco

Treasury Secretary LawrenceSummers visited the Tenderloinneighborhood of San Francisco towitness the impact CDFIs are hav-ing on our nation’s most distressedcommunities and to highlight theimportance of financial literacytraining and personal savings by vis-iting a financial literacy class.

On May 10, Secretary Summerstoured the Tenderloin branch officeof the Northeast Community FederalCredit Union (NCFCU), a certifiedCDFI that was awarded $720,000 bythe Fund in 1998, in part, to fundthe opening of this new branch.NCFCU provides a range of finan-cial services to low-income indi-viduals living in the Chinatown sec-tion of San Francisco. The success

of the Chinatown operationprompted many Tenderloin commu-nity activists and social service agen-cies to approach NCFCU to providesimilar, needed basic financial ser-vices in the Tenderloin, a neighbor-hood that was largely devoid ofmainstream financial institutions.

by Bill Luecht

(See page 5 for details)

The CDFI Fund, through the useof an annual survey, gathers and ana-lyzes data provided by recipients ofawards under the Core Componentof the CDFI Program. The Fund iscurrently in the process of collect-ing information from organizationsselected to receive Core Componentawards in 1996 and 1997. As of the

printing of this newsletter, the Fundhas received and analyzed responsesfrom 60 out of 72 organizations. To-gether, these 60 awardees received$60.3 million in Core Componentawards. The Fund's awards havebeen used to strengthen these insti-tutions and help them achieve theircommunity development missions.

CDFI Fund Investments are Paying Dividends(continued on page 8)

(continued on page 7)

by Lehn Benjamin and Matt Josephs

Secretary Summers highlights the importanceof financial literacy and personal savings.

Register today forFY 2001 Program

Information Sessions

2

Summer 2000 -CDFI Fund Quarterly

• Director’s Viewpoint • • •

Dear Friends:

As we continue to support Community Development Financial Institutions aroundthe country, Fund staff and I have had interesting opportunities to see the workthese institutions are doing in their communities. The organizations we are workingwith are serving their communities through a wide range of financial productsand development services and providing leadership on a host of economicdevelopment issues.

Maurice Jones, the Fund's Deputy Director for Policy and Programs, and I visitedCoastal Enterprises Inc. (CEI) this spring. CEI is based in Wiscasset, Maine,with five offices around the state and serves the entire state of Maine. CEI wasfounded in 1977 and its dedicated staff, including CEI President Ron Phillips, hasbeen working for many years to broaden Maine's economic base and provideaffordable housing and business opportunities in many of Maine's communities.

We had an opportunity to learn first-hand about the exciting work CEI is doing .During our whirlwind trip we saw a wide range of housing options financed byCEI - we visited with a purchase-rehab buyer of affordable housing, looked at a

number of single family housing developments and saw a multifamily housing renovation in progress in a ruralcommunity. The businesses CEI has helped support - both through technical assistance and financing - reflect awide range of economic opportunities in Maine. The New England Call Center provides employment for 104 peopleat its rural location in Waldoboro, Maine. Oyster Creek Farm in Damariscotta, a thriving mushroom business, wasfascinating. We visited with Candice Heydon, who developed her skills as a businessperson through technicalassistance from CEI, and learned about her home-based business, growing shitake mushrooms, selling wild mushroomsand manufacturing a variety of mushroom products. We ended the day at Cuddledown, a manufacturer of custom-made down quilts that also runs a significant mail-order business from its Portland location, providing 96 jobs inthat community. CEI funds Cuddledown through its venture fund.

We also learned much about the significant role CEI plays in helping to stimulate and support industries in Maine.CEI's work with the Maine fisheries industry has helped revive that industry and expand job opportunities in thestate. CEI has been key to developing microenterprises, child care financing and women's businesses in the state,as well. Both Maurice and I were impressed with the work CEI is doing in Maine and the leadership it provides toother organizations.

This issue of the CDFI Quarterly Newsletter is the last one to be editedby Helen Szablya. Helen joined the Fund in early 1998 and helpedlaunch the newsletter and guided many of our outreach activities withthe field. She made a tremendous contribution at the Fund and wewill miss her as she leaves us for an exciting new opportunity.

This Fall will be a busy time for the Fund. We will announce our FY2000 awards shortly, continue our training activities and announceour FY 2001 programs. I hope to continue to hear from you aboutyour work and the economic development activities in your community!

Sincerely,

Ellen Lazar

Pictured from l to r: Ron Phillips, President of CoastalEnterprises, Inc. (CDI); Maurice Jones, Deputy Directorof Policy & Programs CDFI Fund; Christopher Bradley,President of Cuddletown; Ellen Lazar, Director of CDFIFund; Blake Brown, CFO of CEI Loans; NathanielHenshaw, President o f Coastal Ventures Limi tedPartnership (CLVP).

3


Effective immediately, theCDFI Fund will institute achange in the number of bankaccounts that an award recipi-ent organization may indicateas eligible to receive awardpayments. The Fund’s newpolicy allows a recipient orga-nization to designate only onebank account for the purposeof receiving award paymentson any award or awards it mayreceive from the Fund, regard-less of the fiscal year awarddate. This one account will bethe open account on recordwith the Bureau of Public Debtand payments authorized un-der CDFI awards to that orga-nization will be forwarded tothe designated single accountof record.

Any changes an award re-cipient makes regarding itssingle account must still bespecified on an ACH form andforwarded to the CDFI Fundto the attention of the AwardsManager. All old accountswill be retired upon notice ofchange. A copy of the ACHform is available on the CDFIFund web site at http://www.treas.gov/cdfi and can beprinted for use in requesting achange to banking informa-tion. This policy change willhelp to strengthen CDFI Fundmanagement of award and dis-bursement information andenable CDFI Fund staff to bet-ter serve its award recipients.

CDFI Fund PolicyChange Alert CDFI Program

Presidential Awards for Excellence in Microenterprise Development

Program opening to be announced.

NOFA Published Aug 14, 2000 Information Sessions Sept 20 - Oct 6, 2000

Application Deadline Dec 21, 2000

NOFA Published Jan 2, 2001Information Sessions Jan 16 - 26, 2001Application Deadline Apr. 19, 2001

NOFA Published Aug 14, 2000Information Sessions Sept 20 - Oct 6, 2000

Application Deadline Dec 19, 2000

BEA ProgramNOFA Published Sept 5, 2000

Information Sessions Sept 20 - Oct 6, 2000Application Deadline Nov 21, 2000

Core Component

IntermediaryComponent

Technical Asst/(SECAP)Component

CDFI Advisory BoardTreasury Executive Institute Oct 19, 2000Washington, DC

The CDFI Fund welcomesseveral new employees whohave joined in our mission topromote acccess to capital inAmerica’s distressed communi-ties. The following includesrecently hired staff:

• Edward N. Kane, Jr.has joined the Fund as an At-torney Advisor. Prior to join-ing the Fund, Ed was a SeniorProgram Director at The Enter-prise Foundation where he spentthe last three years working on

the Neighborhood Transforma-tion comprehensive communityinitiative in the west Baltimoreneighborhood of Sandtown-Winchester. In addition to hiscommunity development expe-rience, Ed spent six years prac-ticing as a real estate attorneyin Baltimore. He brings to theFund several years of transac-tional legal experience, com-bined with a first hand under-standing of impact on the fieldof the Fund's work. Ed holds aJD from the University of Mary-

New Faces at the CDFI Fund

• FY 2001 Program Calendar • • •


4


CDFI Fund Activities Serving Native American,Native Hawai’ian and Alaska Native Communities

The CDFI Fund is workingin a number of ways to increaseaccess to credit and investmentsfor Native American, NativeHawai'ian and Alaskan Nativecommunities. The followingprovides an update on some ofthe key activities undertaken todate.

Native AmericanLending Study/Action Plan

As reported in an earliernewsletter, the CDFI Fund isconducting a study to assess thecurrent state of credit and invest-ment practices in Native Ameri-can, Native Hawai'ian and Alas-kan Native communitiesthroughout the United Statesand to recommend ways to im-prove access to capital and in-vestments for these communi-ties. We have now completedall 13 workshops covering 10regions throughout the UnitedStates, co-sponsored by 14 re-gional partners including Indianorganizations, Alaskan NativeCorporations, and Hawai'ianstate agencies. The workshopshave included a broad cross-sec-tion of stakeholders - 43% ofparticipants were from theTribal sector, 24% were fromthe private sector, and 33% werefrom the Federal, state and non-profit sectors. In each work-shop, participants identified bar-riers and impacts, and developedstrategies to overcome thosebarriers. It is hoped that thiseffort will contribute to theelimination of barriers that may

exist on either side of the Tribal/financial institution relation-ship, and to assist Native Ameri-can, Native Hawai'ian, and Alas-kan Native communities in fur-ther developing and maintainingself-sustaining economies.

In addition to the workshops,the Fund has developed a sur-vey that will seek responsesfrom a diverse range of finan-cial service organizations, andNative American, NativeHawai'ian and Alaskan Nativeorganizations. In total 1,000organizations will be surveyednationwide to provide the Fundan opportunity to better under-stand specific issues regardingbarriers to lending and invest-ment. The results of this surveywill provide additional sub-stance for the final Study andAction Plan that the Fund willpresent to the President andCongress later this year.

Targeted InformationSessions,CDFI Certification,and CDFI ProgramFunding

Consistent with the goals ofthe lending study to improveaccess to capital and invest-ments in Native American, Alas-kan Native and NativeHawai'ian communities, Fundstaff have been working to in-crease the number of certifiedCDFIs serving these communi-ties. One component of this ef-fort has been to conduct a num-ber of CDFI Program Informa-

tion Sessions in locations moreaccessible to Native Americanorganizations, including severalsessions specifically developedfor and marketed to NativeAmerican organizations. Forthe 2001 award programs, theFund will continue to target itsInformation Sessions to thesemarkets.

The Fund has also continuedto certify CDFIs and providedirect financial support toCDFIs serving these areas (seethe chart on page 12 for ex-amples of some of these organi-zations). These CDFIs are pro-viding a wide range of loans, fi-nancial services, and technicalassistance to communities thatoften do not have sufficient loancapital from traditional lenders.A number of these certifiedCDFIs have reported using theircertification as a means of in-creasing fundraising and/or co-lending relationships with otherfinancial institutions andfunders. Although CDFI certi-fication does not guarantee di-rect assistance from the CDFIFund, 18 of the certified orga-nizations listed on page 12 havereceived direct financial and/ortechnical assistance awardsfrom the Fund. These directawards have been used to in-crease loan capitalization, pro-vide staff training on loan un-derwriting and servicing, con-tract with consultants to im-prove products and loan reviewprocedures, and develop im-proved management informa-tion and loan servicing systems.

By Rodger Boyd,Native American Lending Study, Program Manager


5


FREE INFORMATION SESSIONS

Register ON-LINE Today! www.treas.gov/cdfi

Core & Intermediary Components Open Earlier - August 14, 2000In an effort to provide applicants more time to complete applications and not interfere with the holiday season, the

CDFI Fund launched the 2001 round of the Core & Intermediary Components of the CDFI Program earlier in the year.The next round of the Core and Intermediary Components of the CDFI Program officially “opened" on August 14, 2000with the publication of a Notice of Funds Availability (NOFA) in the Federal Register. Up to $50 million is availablethrough the Core Component, and up to $5 million is available through the Intermediary Component. The applicationdeadline is 6:00 p.m. EST on the following respective dates: Intermediary Component - December 19, 2000; and CoreComponent - December 21, 2000.

BEA Program Opens September 5, 2000The next round of the BEA Program will officially "open" on September 5, 2000. $30 million is being made avail-

able. The application deadline is 6:00 p.m. EST, November 21, 2000.

Free Information SessionsCDFI Fund staff will travel to 12 cities across the nation, listed below, between September 20 and October 6 to

conduct two free Information Sessions per day. The first in-person Information Session will be held in the morning andcover the CDFI Program - Core & Intermediary Components. The second in-person Information Session will be held inthe afternoon and cover the BEA Program.

In addition, the CDFI Fund will broadcast the same Information Sessions to the 81 cities listed below using interac-tive video teleconferencing technology. The CDFI Program - Core & Intermediary video Information Session will bebroadcast on October 11th at 1:00 p.m. EST. The BEA video Information Session will be broadcast on October 12th at1:00 p.m. EST.

Boston, MA Oct. 5, 2000 Memphis, TN Oct. 3, 2000 New York, NY Oct. 6, 2000Charlotte, NC Oct. 4, 2000 Miami, FL Sept. 26, 2000 Salt Lake City, UT Sept. 29, 2000Chicago, IL Sept. 25, 2000 Minneapolis, MN Oct. 4, 2000 San Antonio, TX Oct. 5, 2000Kansas City, MO Oct. 2, 2000 Los Angeles, CA Sept. 20, 2000 San Francisco, CA Sept. 22, 2000

Albany, NYAlbuquerque, NMAnchorage, AKAtlanta, GABaltimore, MDBangor, MEBirmingham, ALBoise, IDBoston, MABuffalo, NYBurlington, VTCamden, NJCasper, WYCharleston, WV

Chicago, ILCincinnati, OHCleveland, OHColumbia, SCColumbus, OHDallas, TXDenver, CODes Moines, IADetroit, MIFargo, NDFlint, MIFort Worth, TXFresno, CAGrand Rapids, MI

Greensboro, NCHartford, CTHelena, MTHonolulu, HIHouston, TXIndianapolis, INJackson, MSJacksonville, FLKansas City, KSKnoxville, TNLas Vegas, NVLittle Rock, ARLos Angeles, CALouisville, KY

Lubbock, TXManchester, NHMemphis, TNMiami, FLMilwaukee, WIMinneapolis, MNNashville, TNNew Orleans, LANew York, NYNewark, NJOklahoma City, OKOmaha, NEOrlando, FL

Philadelphia, PAPhoenix, AZPittsburgh, PAPortland, ORProvidence, RIReno, NVRichmond, VASacramento, CASalt Lake City, UTSan Antonio, TXSan Diego, CASan Francisco, CASan Juan, PR

Santa Ana, CASeattle, WAShreveport, LASioux Falls, SDSpokane, WASpringfield, ILSt. Louis, MOSyracuse, NYTampa, FLTucson, AZTulsa, OKWashington, DCWilmington, DC

All sessions will provide an overview of the regulations governing the programs, a review of the application mate-rials, a demonstration of a new internet-based Help Desk, and Q&A time with CDFI Fund staff. Attendance is notrequired to submit an application.

To attend an Information Session, please register online by visiting the Fund's website at www.treas.gov/cdfi .If you do not have internet access, please call the Fund at (202) 622-8662. An electronic Letter of Confirmation, whichwill include detailed information such as the exact location of the Information Session and local accommodations, willbe e-mailed within 1 hour of online registration. Details can also be obtained by visiting the CDFI Fund's website.

6


Growth in Awardees Total Assets (1994-1999)

0.840.95

1.12

1.36

1.62

2.14

FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999

Dol

lars

in B

illio

ns

Direct Financing

0.45

0.91

0.660.68

1996 1997 1998 1999

Do

llars

in B

illio

ns

60 Core Awardee Assets - Table A

Annual Volume of Lending - Table B

CDFI FUND INVESTMENTS ARE PAYING DIVIDENDS

’

7


The 60 surveyed Core Component awardees'aggregated assets increased by 85 % since receiptof the Fund's awards, growing from $1.16 billionin the aggregate before they received their awardsto $2.14 billion in 1999. Growth in total assetssince 1994 is illustrated in Table A on the previ-ous page.

The 60 surveyed CDFIs made a total of $2.75billion in community development loans and in-vestments between 1996 and 1999. As illustratedin Table B on the previous page, the annual vol-ume of lending increased by over 100% during thisperiod, from $450 million in the aggregate in 1996to $910 million in 1999.

Since the time the awards were made, the di-rect financing provided by these Core Componentawardees has supported the creation and expan-sion of small and micro businesses and the devel-opment and rehabilitation of affordable housingand community facilities such as health clinics andcharter schools. In addition, Core Componentawardees have provided basic financial servicesto low-income individuals. Specifically, the 60Core Component awardees that responded to theFund’s survey have helped to:

√ assist up to 4,230 microenterprises and2,431 businesses;

√ create or maintain up to 36,943 jobs;

√ develop or rehabilitate up to 51,379 unitsof affordable housing;

√ support up to 795 community facilities,including:

• health care facilities serving a total of 56,414 patients;

• schools serving a total of 8,501 students;• childcare facilities accommodating 14,289 children; and• job training facilities serving 5,231cli- ents;

√ Provide 80,564 checking and savings ac-counts totaling $131.72 million, 76% of

which are held by low-income depositors.

The 60 Core Component awardees have lever-aged significant additional capital. Awardees esti-mated that they were able to raise an additional$226,493,319 million in capital, over and abovethe Fund’s one to one matching requirement, as aresult of receiving a Fund award. In addition, in1999, for every $1 these awardees loaned or in-vested in their communities, $1.30 was investedby other entities.

In sum, the Fund's $60.3 million investmentsin 60 Core Component awardees have resulted insubstantial dividends over a short period of time.The Fund’s awards thus have strengthened the ca-pacity of 60 institutions, contributing to theirgrowth in assets and direct lending which hashelped to produce tangible outcomes in communi-ties.

CDFI FUND INVESTMENTS ARE PAYINGDIVIDENDS(continued from cover story)

The CDFI Fund’s $1.75 million grant to NFCDCUwill enable it to expand its management training pro-gram, the CDCU Institute, while expanding IDA andmicrolending programs.

Pictured above (Front Row l to r): Maurice Jones, DeputyDirector Policy & Programs, CDFI Fund; Cliff Rosenthal,Executive Director NFCDCU. (Back Row l to r NFCDCU BoardMembers): Barbara Black, Near Eastside Community FCU(Indianapolis, IN); Michael Chan, Northeast Community FCU(San Francisco, CA); Mary Spink, Lower East Side Peoples FCU(New York, NY); Jean Sample, Austin/West Garfield FCU(Chicago, IL); Elizabeth Shoy, Brooklyn Ecumenical FCU(Brooklyn, NY); Robert Jackson, Quitman Tri-County FCU(Marks, MS); Rita Haynes, Faith Community United CU(Cleveland, OH); Woodrow Keown, College Station CommunityFCU (College Station, AR); Maria Berkowitz, CentralAppalachian People’s FCU (Berea, KY)

NFCDCU Celebrates Signing ofAssistance Agreement

8


Following the financial lit-eracy class, the Secretary par-ticipated in a roundtable discus-sion on the impact that CDFIsare having on distressed com-munities like the Tenderloin andon individuals’ lives. The par-ticipants of the discussionshared their perspectives on thesuccess of NCFCU and its ex-pansion into the Tenderloin; theneed for similar results in otherSan Francisco communities,such as the adjoining South ofMarket neighborhood; barriersto joining NCFCU and othermainstream financial institu-tions; and how to increase creditunion membership.

The discussion was led byMichael Chan, President of theBoard of NCFCU. Theroundtable included GeorgeMcDaniels, President and CEOof the Community Bank of theBay - a certified CDFI; Ana, aclient of St. Anthony's batteredwomen's program and a mem-ber of NCFCU; AntoinettaStadlman, a resident activist ofthe South of Market neighbor-hood; Garrett Jenkins, a well

Since the late 1960s and un-til recently, the Tenderloin hasbeen in steady decline. Over theyears, a lack of private invest-ment created an absentee land-lord environment that acceler-ated the decay of the housingstock, among other problems.The neighborhood becameknown for its unsavory aspectsincluding drugs, crime and pros-titution. Today, particularlywith the influx of immigrantsfrom Southeast Asia, the Tender-loin is becoming one of the mostmulti-cultural communities inSan Francisco and the member-ship of NCFCU reflects this di-versity.

After touring the Tenderloinbranch, Secretary Summers vis-ited a financial literacy class be-ing conductedby NCFCU stafffor 12 clients ofthe St. Anthony'sFoundation. St.Anthony's is asocial serviceagency locatedin the Tenderlointhat provides arange of pro-grams (including a dining roomthat provides over 2,000 mealsa day, a free medical clinic, aclothing and furniture donationprogram, and senior support ser-vices) for low-income andhomeless people. St. Anthony'sactively supported the expan-sion of NCFCU into the Tender-loin and now works in partner-ship with NCFCU and otherTenderloin agencies to addressthe needs of the community in a

holistic way.

Addressing the class, Secre-tary Summers stressed how fi-nancial literacy and personalsavings are important compo-nents of building money man-agement skills and taking con-trol of one's financial life. Theclass was attended by partici-

pants of twodifferent pro-grams admin-istered by St.Anthony's: aprogram thatprovides emer-gency shelterand transi-tional housing

for battered women, and a drugand alcohol rehabilitation pro-gram for men and women. Theclass features interactive ses-sions on budgeting, trackingspending, developing savingsgoals, an overview on credit,and learning about the differ-ences between banks and creditunions. Many of St. Anthony'sclients have become members ofNCFCU.

Secretarial Visit toSan Francisco

(continued from cover story)

Secretary Summers addresses participants of a financial literacy class conducted byNortheast Community Federal Credit Union (NCFCU) staff for clients of the St. Anthony’sFoundation, a social service agency which partners with NCFCU in San Francisco’sTenderloin neighborhood.

“..financial literacy andpersonal savings areimportant componentsof building moneymanagement skills andtaking control of one'sfinancial life.”

9


known resident and communityactivist in the Tenderloin and amember of NCFCU; MalikLooper of the Mayor's Office ofCommunity Development; JoseArce, Vice President & Direc-tor of Community Investment,Citibank, which supportedNCFCU's expansion into theTenderloin; and Anita Macias,Senior Vice President, PacificTelephone, which also sup-ported NCFCU throughPatelco's Adopt a Credit UnionProgram.

As a result of the Secretary’svisit, The San Francisco Exam-iner featured two comprehen-sive articles on NCFCU and theCommunity Bank of the Bay,highlighting the important workof these CDFIs and brought toa higher level, the understand-ing of what a CDFI is and howit can transform a community.The articles can be viewedthrough the Internet at: http://e x a m i n e r . c o m / 0 0 0 5 2 1 /0521tenderloin.html and http://e x a m i n e r . c o m / 0 0 0 5 2 1 /0521fillmore.html .

In addition, NCFCU has re-ceived numerous inquires fromorganizations interested in mak-ing member or non-member de-posits; membership and transac-tion volume has increased; andimmeasurable goodwill hasbeen created within the Tender-loin neighborhood and thelarger San Francisco commu-nity.

The Fiscal Year 2001 Coreand Intermediary Notices ofFunds Availability (NOFAs)were published on August 14,announcing the Fund's sixthCore round and fifth Intermedi-ary round. $50 million is avail-able in the Core Component and$5 million in the IntermediaryComponent.

Following the applicationchanges in 2000, the Fund hasmade some additional changesto the 2001 Core and Interme-diary Applications that are in-tended to make the applicationprocess more transparent andsimpler. Throughout the appli-cation, we have provided clari-fying language to address ques-tions and comments that havebeen raised by CDFI practitio-ners. The application highlightsitems that do not have to becompleted by certain applicants,or where certain applicants maysubstitute alternative informa-tion. Additionally, all of thetables in the application may bedownloaded from the Fund'swebsite in a spreadsheet format,so applicants may more easilyenter numerical data.

The upgraded On-Line HelpDesk gives applicants moreways of designating eligible In-vestment Areas and generatingrequired maps and worksheets.Additionally, the Help Desk in-cludes data about lending bybanks and thrifts in distressedmarkets. This information maybe used in designating Invest-ment Areas and in developingthe market analysis section of

the Comprehensive BusinessPlan.

The Fund regulations allowan applicant to designate a Tar-geted Population made up ofgroups of individuals who havehistorically been underservedby mainstream financial institu-tions (referred to as an "OtherTargeted Population"). The re-vised application and NOFAsmake it easier for applicants todesignate such an Other Tar-geted Population. Previously,the Fund required all such ap-plicants to submit studies dem-onstrating that the identifiedpopulation is underserved, andto demonstrate that their bor-rowers are specifically lackingaccess to credit, equity invest-ments, or financial services.The new standard only requiresapplicants to demonstrate thatmembers of the Other TargetedPopulation in the applicant'sservice area have unmet capitalor financial services needs.Thus applicants may use infor-mation from the Fund's On-LineHelp Desk about mortgage andsmall business lending by tra-ditional financial institutions,surveys of the applicant's clientsindicating disproportionate lev-els of loan denials, studies con-ducted by third parties, informa-tion showing a lack of bankbranches, or other means ofdemonstrating that the popula-tion lacks adequate access toloans, investments, or financialservices.

Applicants to the Intermedi-ary Component will find that the

New Core and Intermediary Applications Availableby Joseph Firschein, CDFI Progam Manager and

Louisa Quittman, CDFI Program Advisor

(continued from previous page)

(See “New Applications” page 14)

The CDFI Fund is grateful to MichaelChan, President of the Board ofNCFCU; and Thomas Gleason,Director of Development &Communications, and Elizabeth Chur,Communications & Media Manager ofSt. Anthony’s Foundation for theirinvaluable help with SecretarySummer’s visit to San Francisco.

10


land School of Law, and a Bachelor of Arts in Eco-nomics from the University of Pennsylvania.

• Tovah Redwood recently joined the Fundas a Financial and Program Analyst in the Policyand Research Unit, where she will concentrate onmonitorings. She previously served as a ProgramReview Officer with Neighborhood ReinvestmentCorporation. Her prior work experience includesplanning and evaluation with foundations, govern-ment and non-profit agencies, and several yearsas a reporter and editor. She earned a Master'sdegree in City Planning from the University ofCalifornia at Berkeley and a Bachelor's degree inUrban Studies from Rutgers University.

• Lori Stormer joined our staff as a Pro-gram and Financial Analyst. Previously, Loriserved as a Presidential Management Intern in theDepartment of Housing and Urban Development'sEmpowerment Zone/Enterprise Community Initia-tive, its Office of Community Planning and De-velopment, the Office of the Vice President's Com-munity Empowerment Board, and the U.S. Gen-eral Services Administration's Center for UrbanDevelopment. She received her Master's degreein Public Administration from Arizona State Uni-versity where she also worked with students, non-profit organizations, and faculty to incorporatecommunity service into the undergraduate core cur-riculum. Lori brings to the Fund a wide variety ofexperiences from non-profit organizations as wellas federal, state, and local government that will bevery beneficial to the Fund.

• Alice Veenstra has joined the Fund as aFinancial & Program Analyst and will work on theNative American Lending Study. Previously, Alicewas a Program Examiner at the Office of Manage-ment and Budget where she analyzed policy, bud-get, and programs related to banking, consumerprotection and community development. She holdsa Masters degree in Public Administration fromHarvard University's Kennedy School of Govern-ment and a Bachelor's degree in Economics andBusiness from Macalester College.

New Faces(continued from page 3)

The CDFI Fund would like to thank the follow-ing Summer Interns for their dedication and hardwork:

Andrew Bernstein - Attending New York Uni-versity, majoring in Psychology. He will be a Se-nior this fall.

Pauline Reader - Attending Princeton Univer-sity, majoring in Economics. She will be a Juniorthis fall.

Kellie J. Maul - Attending Princeton Univer-sity, majoring in Politics with a certificate in Eco-nomics. She will be a Senior this fall.

Melissa Rogers - Attending Agness Scott Col-lege in Decatur, GA, majoring in InternationalRelations. She will be a Senior this fall.

Abel J. Gullién - Attending the Univeristy ofCalifornia, Berkley, Goldman School of PublicPolicy. He is a Masters in Public Policy candi-date.

Rita V. Patraporn - Attending the Universityof California, Los Angeles. She is a Master’s inPublic Policy candidate and a Ford FoundationPublic Policy and International Affairs Fellow.

Edward M. Underwood, II - Attending NorthCarolina Central University, majoring in PoliticalScience/PreLaw. He will be a Senior in the fall.

Thank You!!

FY 2001CDFI & BEA Programs

Information Sessions

Register ON-LINEat

www.treas.gov/cdfi

11


Following the UnitedNations Beijing Con-ference on Women in

1995, the President directed theFund to establish an Inter-agency Workgroup on Micro-enterprise Development to bet-ter coordinate the work of fed-eral agencies involved inmicroenterprise efforts and todevelop a coherent frameworkfor federal government effortsto promote microenterprise.

The Workgroup waslaunched in 1998 and has beenco-chaired by the Fund Direc-tor and the Associate DeputyAdministrator of the SmallBusiness Administration.

Its mission is accomplishedthrough the efforts of threecommittees that were estab-lished by the Workgroup:Policy, Regulatory and Educa-tion. Each committee has a dis-crete area with specific tasks:

* The Education Committeelaunched a website that receives16,000 hits per month. The site,www.sba.gov/microenter, iscurrently being up-dated. Links to Fed-eral agencies are inplace, and links toother related sites arebeing explored.

* The PolicyCommittee's "Policy Paper" hasbeen finalized and distributed toall Federal agencies to use as aguide on future programs andcurrent collaborations. It is alsoposted on the website.

* The Regulatory Commit-tee has worked with the PolicyCommittee to finish the "com-parisons matrix" of Federal Pro-grams and make recommenda-tions for using common termsand making regulatory changesto ease applicationand reporting burdenson constituents.

* The Educationand Policy Commit-tees are developing apublication of casestudies of Federalmicroenterprise programs. Thepublication effort has been ledby Elaine Drapeau, FDIC. Thepublication will include: an in-troduction written by the co-chairs of the Workgroup; thecase studies; the definition ofterms as used by Federal agen-cies (Regulatory Committee);and the "comparisons matrix."The publication will belaunched in the fall and will beposted on the website.

* The Workgroup also con-ducted a meeting in May inWashington, DC that included

practitionersfrom the field:Jannie Barrera,Accion, TX;Elen Golden,Coastal Enter-prise, Inc.; and

Christopher Sikes, WesternMassachusetts Enterprise Fund,Inc. The discussion revolvedaround what works and whatdoes not work for those practi-tioners in the field that use the

Federal programs. It was con-sidered very useful by agenciesand practitioners alike, leadingtowards suggested solutions toidentified problems.

* The InteragencyWorkgroupconducted apanel at theAEO's an-nual confer-ence, "Con-v e r s a t i o nwith Federal

Agencies" -- in May, in Lowell,MA. Again, the intention wasfor the audience to ask ques-tions of the Federal representa-tives, and explore ways the pro-grams can be more accessibleto practitioners. CharlesTansey, SBA, Marta Brenden,Office of Refugee Re-Settle-ment, HHS, Helen Szablya,CDFI Fund and Bill Hagy,USDA, served as panelists.

Beginning in the fall, the In-teragency Workgroup will con-vene a series of Brown Baglunches with designated topicsdesigned to inspire conversa-tion that will add value to theFederal role in theMicroenterprise field. Thesewill be held in Washington, DC.

If you are interested in noti-fications of the Brown Baglunches, please e:mail DebbiSmith: [email protected].

Interagency Workgroup on Microenterprise Developmentby Helen Szablya

“The (workgroup)launched a websitethat receives 16,000hits per month.”

“The Education andPolicy Committeesare developing apublication of casestudies....”

12


The Fund will continue to encourage NativeAmerican, Alaskan Native, and Native Hawai'ianorganizations to submit applications for certifica-tion and funding, and will continue to provide in-formation to and answer questions for those orga-nizations who do not currently meet eligibility re-quirements. Finally, the Fund has proposed in itsfiscal year 2001 budget to set aside $5 million toestablish training and technical assistance pro-grams to increase access to capital within NativeAmerican, Alaskan Native and Native Hawai'iancommunities. These funds will compliment theFund's existing financial and technical assistanceprograms for underserved communities and willprovide another tool for communities seeking toaddress unmet credit needs.

Native American Lending StudyUpdate

(continued from page 4)

Selected CDFIs Serving Native American,Alaskan Native, and Native Hawai'ian Commu-nities

Alaska Growth Capital BIDCO, Anchorage, AK*Blackfeet National Bank, Browning, MTCascadia Revolving Loan Fund, Seattle, WA*Cherokee Nation Economic Development Trust Authority,Tehlequah, OKFirst American Credit Union, Window Rock, AZ*Haa Yakaawu Financial Corporation, Juneau, AKHawaii Community Loan Fund, Honolulu, HI*Hopi Credit Association, Keams Canyon, AZ*Kekaha Federal Credit Union, Kekaha, HI*Lakota Fund, Kyle, SD*LoKahi Pacific, Wailuku Maui, HI*Midwest Minnesota CDC, Detroit Lakes, MN*Native American Development Corporation, Billings, MTNebraska Micro Enterprise Partnership Fund, Walthill, NE*New Mexico Community Development Loan Fund, ABQ, NM*Northeast Entrepreneur Fund, Virginia, MN*Northeast South Dakota Economic Corporation, Sisseton, SD*Rural Community Assistance Corporation, Sacramento, CA*Rural Development & Finance Corporation, San Antonio, TX*Rural Enterprises of Oklahoma, Inc., Durant, OK*South Dakota Rural Enterprise, Inc., Sioux Falls, SD*Tlingit-Haida Regional Housing, Juneau, AK*

* Indicates that the organization also received assistance fromthe Fund under the CDFI Program.

As of August 16, the Fund has certified 406CDFIs throughout 49 states, plus the District ofColumbia, Puerto Rico, and the U.S Virgin Islands.The only state in which there is not a certified CDFIis Wyoming. For the most recent listing of certi-fied CDFIs, visit the Fund's website atwww.treas.gov/cdfi.

Because a number of organizations had CDFIcertifications due to expire on July 1, 2000, overthe past year the Fund has been working to ensurethat all certified CDFIs are aware of their certifi-cation expiration date and are able to submit theirre-certification materials prior to that date. Mostof the organizations with a July 1 certification ex-piration date submitted re-certification materialsto the Fund prior to this date. For those organiza-tions with a July 1 expiration date that timely sub-mitted re-certification applications that the Fundwas not able to review completely prior to the ex-piration date, the Fund has extended the currentcertification pending the completion of the Fund'sreview. We expect to complete these reviews overthe next several months. Certified CDFIs that donot submit re-certification materials to the Fundas of their certification expiration date will be re-moved from the list of certified CDFIs.

Applicants may apply for re-certification at anytime by completing the Fund's stand-alone certifi-cation application. Organizations may also applyfor re-certification as part of an application forfunding under the CDFI Core and IntermediaryComponents. In addition, the Fund plans to issuea combined funding and certification applicationin early January of 2001 for a new Small andEmerging CDFI Assistance (SECA) Component ofthe CDFI Program, designed to provide limitedamounts of technical assistance and financial as-sistance to small and emerging CDFIs. Both thestand-alone certification application and the com-bined applications for funding and certification maybe obtained directly from the Fund's website,www.treas.gov/cdfi. Requests for applications canbe made by e-mail at [email protected], tele-phone at (202) 622-8662, or by fax at (202) 622-7754.

CDFI Certification Updateby Yoo Jin Na, Financial & Program Analyst

13


Fund Director EllenLazar, traveled toMilwaukee recently

to underscore the importance ofCommunity Development Fi-nancial Institutions (CDFIs) incommunity devel-opment and theprovision of de-velopment ser-vices. In addition,she congratulatedLegacy Bank andLegacy Bancorpfor their commit-ment to fosteringeconomic devel-opment andgrowth in eco-nomically dis-tressed neighbor-hoods of Milwaukee. Lazar, thefeatured speaker at a luncheonsponsored by Legacy Bank,highlighted the achievementsthe bank is making through pro-viding loans and investments,facilitating economic rejuvena-tion of the city's poorer neigh-borhoods.

Lazar illustrated the Fund'saccomplishments with ex-amples of success stories of sev-eral CDFIs, including theBethex Federal Credit Union insouth Bronx, New York. Withthe help of a $100,000 awardfrom the Fund in 1996, she said,Bethex offers low cost financialservices to residents in southBronx whose alternatives pre-viously included paying highservice fees and interest rates tocheck cashing operations, pawnshops, and "loan sharks.”

In addition, she said thatmoney from the Fund has beeninstrumental in developing andrehabilitating over 28,000 unitsof affordable housing, and de-veloping hundreds of commu-

nity facilities in-c l u d i n gchildcare cen-ters, job trainingcenters, healthcare centers, andcharter schoolsin economicallydisadvantagedareas nation-wide. "Lots oflower-incomepeople maynever in [their]wildest dreams

have conceived of having ac-cess to credit so they could owna business", she said.

The Fund awards dollars toCDFIs through three compo-nents of the CDFI Program, in-cluding the Technical Assis-tance Component, the Interme-diary Compo-nent, and theCore Compo-nent. The Fundmakes awardsthrough theCDFI Programfor the purposeof investing inand buildingthe capacity ofCDFIs. Finan-cial assistanceis available inthe form of grants, loans, equityinvestments, and deposits, inaddition to technical assistance

grants.

The Bank Enterprise Award(BEA) Program provides incen-tives to banks and thrifts to in-vest in CDFIs and increase theirlending, investments, and pro-vision of financial services ineconomically distressed com-munities. Financial institutionsthat received the awards in thefirst four rounds of the BEAProgram have provided nearly$2 billion in direct lending and$439 million in equity invest-ment and financial support toCDFIs in impoverished areas.Banks such as the Bank of Ha-waii in Honolulu and theCaldwell Bank and Trust in Co-lumbia, Louisiana used theirBEA Program award money tofund economic literacy trainingfor low-income youths, andsupplementing services to cus-tomers to provide free servicecharges to students and seniorcitizens, respectively. One ofthe interesting aspects of theBEA Program, Lazar said, is

that althought bankscan spend the awardmoney however theychoose, many institu-tions have opted to re-invest the funds intheir communities.

An applicant forthe BEA Programaward that is a tradi-tional bank or thriftbut is not certified asa CDFI, she said, is

eligible to receive a grantequivalent to 15 percent of thedollar value of increased equity

Director Lazar Visits Legacy Bankby Melissa Rogers Summer Intern

Ellen Lazar, DirectorCDFI Fund

Milwaukee MayorJohn O. Norquist

(see Legacy Bank page 14)

14


The Community DevelopmentFinanical Institutions Fund is awholly-owned government cor-poration within the U.S. De-partment of the Treasury. ItsVision: An America in whichall people have access to capi-tal and finanical services. ItsMission: Promote access tocapital and local economicgrowth by directly investing inand supporting community de-velopment financial institu-tions (CDFIs) and expandingfinancial service organization’slending, investment, and ser-vices within underserved mar-kets.

The CDFI Fund encourages thedissemination of new ideas andinformation to further commu-nity development in the UnitedStates. Articles authored bypeople who are not CDFI Fundemployees, however, may notbe endorsed by the Fund norhas the Fund conducted anyindependent research to deter-mine their accuracy.

“CDFI Fund Quarterly”is de-signed and edited by the CDFIFund’s External Affairs Officeand published every threemonths.

If you receive duplicat issuesof this newsletter, please notifyus.

Phone: 202-622-8662Fax: 202-622-7754

VISIT OUR WEBSITEFOR UP-TO-DATE

INFORMATION ON THEFUND

WWW.TREAS.GOV/CDFI

application clarifies the infor-mation required on their activi-ties. In particular, the applica-tion requests information on In-termediary applicants' activitiessupporting small and emergingCDFIs and CDFIs that have notreceived funding from the CDFIFund.

In September and October,Fund staff will conduct infor-mation sessions at 93 sites (12in-person and 81 via video tele-

conference) across the nation.These half-day sessions, whichwill be held from September 20through October 13, are open toall interested parties and are freeof charge. These sessions willprovide an opportunity to learnmore about the application pro-cess and to have questions an-swered. For more information,please visit the Fund's websiteat www.treas.gov/cdfi or call usat (202) 622-8662.

FY 2001 Program Information SessionsRegister ON-LINE atwww.treas.gov/cdfi

investments made to CDFIs, 11percent of the dollar value of in-creased loans, deposits andtechnical assistance made toCDFIs serving distressed com-munities, and 5 percent of theweighted dollar value of in-creased services, lending, andinvestment in distressed com-munities.

The Fund awarded LegacyBank and Legacy Bancorp, bothcertified CDFIs, a $21,500 tech-nical assistance grant in 1998and made a $1.5 million equityinvestment the following year.Lazar congratulated Legacy forits work in increasing the avail-ability of funds for economicgrowth and opportunities forMilwaukee's residents. "Webased our awards on businessplans that really sold us on theirability to be able to penetrate in

their market to provide not onlygood service but assistance topeople in the community,” shesaid.

The Fund's mission is to pro-mote access to capital and localeconomic growth by investingin and supporting CDFIs, com-munity-based non-profit or for-profit financing institutionswhose primary mission is com-munity development. Financialinstitutions interested in apply-ing for a Core Componentaward for FY 2001 must submitan application by December 21,2000. The Notice of FundsAvailability was published inthe Federal Register on August14, 2000.

For additional informationabout the CDFI Fund and itsprograms, please visit ourwebsite at www.treas.gov/cdfi.

(continued from page nine)New Applications

Legacy Bank(continued from page 13)

15


Lehn BenjaminFinancial and Programs Analyst

James BergFinancial and Program Analyst

Jeffrey BergLegal Counsel

David BowersFinancial and Programs Advisor

Rodger BoydNative American Programs Manager

Barbara BrennanBudget Analyst

Ronald Chung-A-FungAttorney Advisor

Fredric CooperPrograms Manager

Sarah Crowley GeislerFinancial and Programs Analyst

Donna FabianiFinancial and Programs Advisor

Joseph FirscheinProgram Manager

Janis HockenberryAwards Manaagement Specialist

Jeannine JacokesProgram Manager

Matthew JosephsFinancial and Programs Analyst

Maurice JonesDeputy Director for Policy andPrograms

Owen JonesDeputy Director for Management/CFO

Edward KaneAttorney Advisor

Terry KeyfauverComputer Specialist

Patricia KrackovFinancial and Programs Advisor

Steven LaughtonDeputy Legal Counsel

Ellen LazarDirector

William LuechtExternal Affairs Specialist

Rosa MartinezFinancial and Programs Analyst

Ashanti McCallumLegal Assistant

Caroline McComberManagement Analyst

Jean MorrowAwards Manager

Yoo Jin NaFinancial and Programs Analyst

Margaret NilsonFinancial and Programs Advisor

Deattra PerkinsFinancial and Programs Analyst

Cathy PresnellFinancial Manager

Donna ProkopAssistant Awards Manager

Louisa QuittmanFinancial and Programs Advisor

Kurt RakouskasAdministrative Services Specialist

Tovah RedwoodFinancial and Programs Analyst

Dawn ReiffFinancial and Programs Analyst

Enitza RodriquezAccounting Technician

LaQuita SandersBudget Analyst

Carolyn SmithContract Specialist

Deborah SmithExternal Affairs Specialist

John SmithOffice Support Assistant

Paula Smith ArrigoniFinancial and Programs Analyst

Shamla SmithAccounting Technician

Kyle StentifordOffice Support Assistant

Lori StormerFinancial and Programs Analyst

Helen SzablyaExternal Affairs Officer

Yvette ToliverOffice Support Assistant

Michael TroopLegislative Affairs

Alice VeenstraFinancial and Programs Analyst

Jennifer WesterbeckFinancial and Programs Analyst

Pamela WilliamsFinancial and Programs Analyst

LaSean YoungAdministrative Services Specialist

Sean ZielenbachFinancial and Programs Analyst

CDFI Fund Management and Staff

CDFI Fund Advisory Board

Clara G. Miller, ChairMember of theBoardNational Community Capital Association

Gregory BaerAssistant Secretary, Financial InstitutionsUS Department of the Treasury

Frank T. BallesterosDeputy Chief Executive OfficerPPEP Microbusiness and HousingDevelopment Corporation, Inc.

Arthur C. CampbellDeputy Under Secretary for Rural Economic& Community DevelopmentUS Department of Agriculture

Cardell CooperAssistant Secretary, Office of CommunityPlanning and DevelopmentUS Department of Housing and UrbanDevelopment

Connie EvansPresidentWomen’s Self-Employment Project

George GoverAssistant Secretary for Indian AffairsUS Department of Interior

John A. LitzenbergProgram OfficerCharles Stewart Mott Foundation

Chester StraubDeputy Assistant Secretary, Office of ProgramOperationsUS Department of Commerce

George P. SurgeonChief Financial OfficerShorebank Corporation

Charles TanseyAssociate Deputy AdministratorUS Small Business Administration

John E. TaylorPresident and CEONational Community Reinvestment Coalition

601 Thirteenth Street, NWSuite 200 SouthWashington, D.C. 20005

ADDRESS CORRECTION REQUESTED

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Documents

Summer 2000, Volume 3, Number 3 Inside Secretary Summers ... · Summer 2000 -CDFI Fund Quarterly Effective immediately, the CDFI Fund will institute a change in the number of bank