Innovative Approach to Increase CDFI Financing in Smaller Markets Also Draws $10 Million in CDFI Financing from Bank of America
The founding Board of Directors of CDFI Friendly Bloomington announced today that the new entity will launch with $4 million in financing from local banks and public sources. It will use that capital to assist CDFIs working in Bloomington and surrounding Monroe County, Indiana.
The primary goal of CDFI Friendly Bloomington is to match local Bloomington and Monroe County financing demand to CDFIs across the state, region, and nation. It will hire an Executive Director in early 2019.
CDFI Friendly Bloomington is the product of more than 18 months of collaboration and organizing across Bloomington’s public, philanthropic, business, housing, and civic leadership. The concept of CDFI Friendly Communities prompted by Bloomington has drawn national attention.
Bloomington is the nation’s first “CDFI Friendly Community.”
“Today is an exciting day for the greater Bloomington community,” said CDFI Friendly Bloomington board President Tina Peterson, who also serves as the President and CEO of the Community Foundation of Bloomington and Monroe County. “The launch represents public and private collaboration at its best. It will allow us to address the local needs of local people and ultimately impact those who call our community home.”
Bloomington Mayor John Hamilton added that “CDFIs can help provide key financial tools in tackling the challenges of affordable housing in Bloomington, while also helping to spur small business growth. As we launch the nation’s first ‘CDFI Friendly City,’ Bloomington is harnessing the power of national financing to activate and amplify local resources.”
Four local and regional banks are planning to invest $2 million in senior debt to CDFI Friendly Bloomington. They are First Financial Bank, Old National Bank, German American Bank, and Woodforest National Bank. The Bloomington Urban Enterprise Association (BUEA), a public-private partnership, and the Bloomington Redevelopment Commission each plan to make $1 million capital grants, as well.
$10 Million for CDFIs
In support of CDFI Friendly Bloomington, Bank of America has committed to lend up to $10 million at 1% to CDFIs that participate in the Bloomington effort alongside the new entity. The Bank will lend to CDFIs for up to 10 years.
“I am excited about the public-private partnership evolving to support CDFIs in Bloomington, explained Dan Letendre, Bank of America’s CDFI Executive. Bank of America is the nation’s largest private investor in CDFIs in the U.S.
Letendre explained in a letter of support for CDFI Friendly Bloomington that the Bank’s financing is “an effort to support CDFIs in this initiative and an incentive for CDFIs to do business in Bloomington, Indiana.”
“This approach can serve as a model for CDFI expansion in many other markets” he added.
Yesterday the founding CDFI Friendly Bloomington Board convened for the first time to establish the entity. The Board includes community leaders, funders and investors, and Mayor Hamilton.
Board Member Jane Kupersmith, a local business owner representing the BUEA on the new Board, said that CDFI Friendly Bloomington will stimulate new opportunities for CDFIs. “I think we won’t even know how many projects are out there under the surface” until CDFI Friendly Bloomington starts work.
CDFI Friendly Bloomington worked with Five/Four Advisors to develop its strategy. For more information and to learn how your community can become “CDFI Friendly,” write to firstname.lastname@example.org.