[Congressional Record Volume 142, Number 33 (Tuesday, March 12, 1996)]
[Senate]
[Pages S1790-S1791]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND

  Mr. LEAHY. Mr. President, I would like to take this opportunity to 
thank

[[Page S1791]]

Senator Bond and Senator Mikulski for including funding for the 
Community Development Financial Institutions [CDFI] Fund in the fiscal 
year 1996 omnibus appropriations bill.
  The CDFI Fund is a key priority for President Clinton. Its inclusion 
in title I indicates an honest effort by Senator Bond and Senator 
Mikulski to address the President's concerns by providing real dollars 
for the programs important to the administration. If more disagreements 
had been resolved with this level of cooperation and compromise, we 
would be debating a bill today that the President would be eager to 
sign.
  President Clinton and Vice President Gore campaigned in 1992 to 
create a new partnership with the private sector to revitalize 
economically distressed communities. The President and Vice President 
spoke passionately about their vision for supporting local community 
development banks. After the election of 1992, both Republicans and 
Democrats in the last Congress turned the President's vision into 
ground-breaking legislation that created the CDFI Fund. The legislation 
passed the Senate unanimously and was approved by a 410-to-12 vote in 
the House.
  Unfortunately, previous fiscal year 1996 appropriation bills 
terminated the CDFI Fund before even giving this program a chance to 
succeed. That was a shortsighted mistake, and one that this bill 
corrects.
  The fund is a small but very innovative program. For a modest $50 
million budget, the fund has the potential to make a significant impact 
in distressed communities.
  How would CDFI succeed in areas where more traditional financing has 
failed?
  The fund would create a permanent, self-sustaining network of 
financial institutions that would be dedicated to serving distressed 
communities. These financial institutions include a fast-growing 
industry of specialized financial service providers--community 
development financial institutions. The fund would also provide 
incentives for banks and thrifts to increase their community 
development activities and invest in CDFI's.
  The CDFI Fund's initiatives would be an innovative departure from 
traditional community development programs because they leverage 
significant private sector resources. The Department of Commerce 
estimates that every $1 of fund resources would leverage up to $10 in 
non-Federal resources. And these locally controlled CDFI's would be 
able to respond more quickly and effectively to market-building 
opportunities than traditional community development organizations.
  I would like to share with you two examples from my own State of the 
potential benefits of the CDFI program. The Vermont Development Credit 
Union [VDCU] is an innovative depository institution providing 
counseling-based financing and other banking services to moderate and 
low-income Vermonters since its inception in 1989. Located in Vermont's 
only Enterprise Community, the credit union is uniquely positioned to 
provide credit to the State's neediest residents. VDCU is applying for 
CDFI funding to help them make long-term loans for affordable housing, 
expand small business lending, and develop partnerships with other 
service providers to find creative solutions to community development 
financing.
  Another Vermont organization hoping to participate in the CDFI 
program is the Vermont Community Loan Fund [VCLF]. This statewide 
nonprofit community development financial intermediary has been 
providing flexible financing and technical assistance to low-income 
Vermonters for almost a decade. Financial assistance from the CDFI Fund 
will allow the VCLF to make long-term loans for affordable housing, 
undertake new initiatives such as lines of credit for nonprofit 
organizations, and develop a viable small-scale equity product for 
Vermont's smaller businesses.
  Access to credit is a significant hurdle for low-income Vermonters 
and small business start-ups in rural areas. The Vermont Development 
Credit Union and the Vermont Community Loan Fund have proposals that 
would address these needs in many parts of Vermont. All that is lacking 
is the capital that the CDFI program can provide.
  The CDFI Fund is an idea that could bring real growth and 
improvements to our most disadvanted communities. I congratulate 
Senator Mikulski and Senator Bond on giving the program the chance to 
succeed.

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