If Community Development Financial Institutions (CDFIs) get their way, a new program of federal credit support to help them issue bonds will have simple regulations that allow for maximum flexibility and fast implementation. Dozens of major CDFIs made their wishes known in comments recently posted by the Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund). To see all the comments, click here.

The CDFI Bond Program, enacted by the Small Business Jobs Act of 2010 (Public Law 111-240), will provide long-term (up to 30 years), low cost capital by virtue of a federal guarantee on $1 billion a year in bond issues. Treasury was supposed to issue rules governing the program in September, but it’s unclear when they will finally issue them.

The CDFI Fund is the program administrator of the new program, with the Treasury Department guaranteeing the full amount of notes or bonds issued to support CDFIs that make investments for eligible community or economic development purposes. The bonds or notes will support CDFI lending and investment by providing a source of long-term, patient capital to CDFIs.

Potential CDFI applicants, community development trade groups and members of the general public were invited to provide written comments. Questions included in the request covered issues regarding the definitions of statutory terms and program parameters, eligible use of funds, eligible entities and required qualifications, underwriting criteria and guarantee provisions, and accountability and compliance measures.

For a detailed story on how the money might be used and what CDFIs are doing to prepare, please see the September/October issue of Sustainable Communities magazine.  Single copies of the magazine may be purchased through this website. To receive the magazine regularly, become a member of The Partnership for Sustainable Communities. 

The Federal Register Request for Public Comment notice, published on July 1, 2011, may be viewed here.