Not CDFI BANKS, IN PARTNERSHIP, LEVERAGE PRIVATE AND PUBLIC FUNDS TO ENHANCE THE COMMUNITIES WE SERVE By Kent Curtis, CEO & President, First Southwest Bank The August edition of Colorado Banker shined a light on the power of Community Development Financial Institutions (CDFI) to make big impacts in partnership with the people in the communities they serve. It explained the origins of CDFIs and what has become a social and economic justice movement within the community development finance field. The article described the mission of CDFIs as entities that invest local, state and federal resources, in combination with private sector capital, to finance people and projects in communities historically unable to access it. The Riegle Community Development Banking and Financial Institutions Act of 1994 received bi-partisan and broad support from both houses of Congress, and President Bill Clinton signed it into law Sept. 24, 1994. The Act established CDFIs to promote economic revitalization and community development in both urban and rural communities. CDFIs were also a response to historical injustices like red-lining and were created to help industrious people, both urban and rural, including farmers and ranchers, women-, veteran-, and immigrant-owned, start-up and established business owners, qualify for financing to pursue their dreams and aspirations. We at First Southwest Bank (FSWB), serving rural Colorado, are proud to be one of two CDFI banks in Colorado; the other is Native American Bank in Denver. FSWB earned this designation from the U.S. Treasury in 2014. Initially excited to see a spotlight shown on CDFIs, we would like to correct an assertion that CDFIs are exclusively nonprofit entities. It is true that the majority of today’s ~1,300 CDFIs – made up of banks, credit unions, nonprofit loan funds, and venture capital funds – are nonprofit entities. There exists, however, a small and mighty group of 135 community development banks, nationally represented by the Community Development Bankers Association, which are public and private enterprises doing things a bit differently than most banks. As with other CDFIs, partnership is central to our work since we know we can do more to fulfill our community development missions together than apart. One of our most unique partnerships is with our affiliated nonprofit revolving loan fund, First Southwest Community Fund, established in 2015 to provide riskmitigating gap funding to rural Colorado communities. In partnership, we work to address community needs, Just Nonprofits www.coloradobankers.org 4
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