Sunrise Banks is a Community Development Financial Institution (CDFI). But what does that mean? How is it different from a normal bank?
Community Development Financial Institutions (CDFIs) are banks, credit unions, loan funds, and venture capital providers with a mission to revitalize communities. To accomplish this goal, CDFIs foster economic opportunity and promote financial wellness and inclusion for struggling individuals, families, and small businesses nationwide.
The U.S. Department of Treasury’s CDFI Fund Off Site Link provides financial assistance to CDFIs. It plays a vital role in generating economic growth, prosperity, and opportunity in some of the country’s most distressed neighborhoods. The Fund also produces valuable research based on data analysis derived from specific information the awardees are required to provide.
A relatively new federal program, the CDFI Fund was created in 1994 to address gaps in lending and other banking services and has injected more than $5.2 billion Off Site Link to date into disadvantaged communities through various institutions and programs. The ripple effects of this incredible economic activity are nearly immeasurable. CDFIs also recently became a trusted and specially designated resource for COVID relief initiatives like the Paycheck Protection Program.
Highlighting the Important Work of CDFIs
The LA Times surveyed over 500 CDFIs and the list highlights the financial institutions that actively generate economic opportunity and growth where needed. Let’s take a closer look at the data, which reveals detailed information about the CDFIs – how much money they have loaned out, what the funds were used for, where they operate, and whom they serve.
The analysis by the LA Times divides the CDFIs into four groups: Bank/thrift, credit unions, loan funds, and venture capital funds. Of the 100 financial institutions on the list, 85% are categorized as loan funds. However, this large group holds only 30% of the total funding accounted for on the list. Additionally, credit unions make up 5% of the surveyed CDFIs and hold 12% of the funding on the list, while venture capital funds make up only 2% but hold 33% of the total funding.
Finally, let’s look at the bank/thrift category data, which includes Sunrise Banks. Here, the term “thrift” refers to a type of financial institution that specializes in offering savings accounts and originating home mortgages for consumers. This category represents 8% of the CDFIs participating in the survey. Despite the small representation, however, bank/thrift holds 25% of the total funding.
How Sunrise Measures Up
While in the great company of many highly-achieving CDFIs on the list, Sunrise Banks – a CDFI for 20 years – is one of the only true community banks providing real banking services to un and under-served people and businesses.
Out of the 100 participating CDFIs, Sunrise is number four on the list for the total amount in loan origination, with $639,487,601, and holds 21.7% of the total funds accounted for in the bank/thrift category. Notably, much of our nearly $2 billion in assets comprises consumer loans, allowing us to pour capital back into the neighborhoods in which we live and serve.
As a trusted and savvy CDFI lender, we help many local businesses flourish and assist countless low- and moderate-income families in realizing their version of the American dream. For example, we provide access to capital for the husband and wife to start a bakery out of their home with no credit. We help the seasonal lawn care business meet payroll for their employees. We offer much-needed assistance to a local daycare struggling to cover unexpected expenses.
This is where Sunrise shines.
Sunrise’s Leadership in the CDFI Space
Wholly committed to giving back to the community, Sunrise Banks is instrumental in promoting economic growth in underserved neighborhoods within the Twin Cities.
As a clear leader in the CDFI space, Sunrise is pleased to be recognized on the LA Times list for actively serving our community's un- and under-banked members, helping to strengthen local businesses, and revitalizing distressed neighborhoods.
Learn more about our work as a CDFI and other social impact affiliations.