NEW YORK—The Federal Reserve Bank of New York today released a research report by its Community Development Team that finds assets held by Community Development Financial Institutions (CDFIs) have nearly tripled in the last five years, reaching more than $450 billion.
The research report, “Sizing the CDFI Market – Understanding Industry Growth,” notes that the number of CDFIs grew 40 percent during the past five years, as more depository institutions, such as credit unions and banks, became certified as CDFIs. The number of CDFI credit unions almost doubled during this period, growing from 290 in 2019 to 529 in 2023.
CDFIs were designated under a 1994 law to provide financing to households, businesses, and real estate developers in low- and moderate-income communities. The law also created the CDFI Fund, a sub-agency of the U.S. Treasury Department, which is the gatekeeper for CDFI certification. Institutions with CDFI certification are eligible for competitive federal awards to finance activities including mortgages for first-time homebuyers, flexible underwriting for community facilities, and commercial loans for businesses in low-income areas. CDFIs also use capital from banks, other government agencies, philanthropy, and other investors.
For more information on the Community Development Team, visit the New York Fed’s website.