Sunrise Banks is one of approximately 954 Certified Community Development Financial Institutions (CDFIs) in the United States and one of 32 in Minnesota. Last week, CDFIs from across our region participated in a meeting to talk about challenges, opportunities, and ways to collaborate in order to work more effectively.
At the event, it became clear that CDFI’s often struggle with awareness – that is – not many people know what a CDFI is or why it matters. Unless you work for a CDFI or have received assistance from one, it is very likely that you are wondering now – just what is a CDFI?
For starters, CDFI stands for Community Development Financial Institution. CDFIs are certified through a rigorous process by the CDFI Fund, which is part of the U.S. Department of Treasury. CDFIs are mission-driven financial institutions dedicated to community development. They provide a range of products and services targeted to economically distressed communities, such as mortgage financing for low-income and first time homebuyers, flexible underwriting for nonprofit organizations, and commercial loans to expanding businesses in low-income areas.
CDFIs also come in a variety of forms – CDFI Banks (like us!), CDFI Credit Unions, CDFI Loan Funds, and CDFI Venture Capital Funds. Each form has its own unique markets, challenges, and opportunities, but at the end of the day, all CDFIs are committed to meeting the financial needs of underserved communities. Each CDFI plays an important role in promoting access to capital and economic growth in urban and rural low-income communities across the United States.