Secretary of the Treasury Timothy Geithner recently announced a new initiative under the Troubled Asset Relief Program (TARP) that would effectively offer better terms to regulated CDFIs than are available to commercial banks and facilitate investment of low-cost capital in CDFIs that lend to small businesses in distressed communities. Under the program, banks may receive TARP funds equal to up to 5% of risk-weighted assets at a dividend rate of 2% for the first 8 years, and then to 9%. Credit unions may receive TARP Funds up to 3.5% of their total assets at 2% for up to 8 years.
Community Development Financial Institutions (CDFI) Fund Director Donna Gambrell and Advisory Board Chairman William Bynum recently commented on the initiative. Director Gambrell observed:
“The resources deployed through this TARP initiative will be used to spur economic growth and create needed jobs in distressed communities. The terms set forth by the Treasury Department will provide critically needed capital investment into CDFIs depository institutions, which will result not only in creased small business and community development lending”¦ it will also ensure that decades of gains these mission-driven lenders have made building communities are not reversed by the economic downturn.”
Director Gambrell will deliver the keynote address at NH&RA’s Winter New Markets Tax Credit Symposium, March 10 at the Ritz-Carlton South Beach, Miami Beach, Florida. Online registration is available here. Questions? Contact Thom Amdur at tamdur@housingonline.com or (202) 939-1753. Read more…
