Ending Hunger in America, 2014 Hunger Report Full Report | Page 64

People who were not
born in the United
States are more
likely than U.S.-born
residents to start and
own businesses.

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54? Chapter 1

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have created 2,200 jobs and returned $64 million annually to their communities in payroll,
taxes, and rent.77
Nationwide, there are more than 900 CDFIs managing more than $50 billion in
assets.78  In 1994, Congress established the CDFI Fund to provide financial support to
CDFIs. Federally approved CDFIs must make at least 60 percent of their loans in low- and
moderate-income communities. CDFIs specialize in loans to borrowers who need a great
deal of technical assistance. Mark Pinsky, head of the Opportunity Finance Network, the
nation’s largest network of CDFIs, describes them as “profitable but not profit-maximizing,”
and calls them “responsible high-risk
lenders.” They are the antithesis of subprime lenders that have done so much to
undermine the stability of low- and moderate-income communities. CDFIs have
been viewed positively by both Democrats and Republicans, according to
Pinsky. “It doesn’t matter what political
stripe you are, if you understand that $1
of public money can be used to leverage
$10 to $20 in private money, there’s a lot
of bang for your buck.”79
A CDFI Bond Guarantee Program,
established under the Small Business
Jobs Act of 2010, authorized the CDFI
Fund to issue up to $1 billion annually
in long-term bonds at low-interest rates.
Application materials were released
finally in June 2013. The program was
supposed to operate from 2011 to 2014.
It was held up in Congress for more
than two years pending approval on how
the program should be run as part of
the CDFI Fund. The delays resulted in
$2 billion less in loans to support entrepreneurs in low-income communities.80
Congress should have moved more
quickly and the administration should
have been a stronger advocate for the program to overcome the delays. The lack of
urgency in both branches of government
underscores how removed they are from
the reality in low-income communities.

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