N.Y. Urban Development Corporation Act 174/68 § 16-o: The community development financial institutions program

§ 16-o. The community development financial institutions program. 1.

Legislative intent. The legislature hereby finds that credit, banking

services, and investment capital are vital to the revitalization of

communities and neighborhoods throughout the state. The legislature

further finds that many communities with the greatest potential for

growth and the greatest need for jobs and investment lack access to the

services and capital of traditional banking and lending institutions.

The legislature further finds that access to banking services and

capital can be improved through a growing network of alternative

financial service providers known as community development financial

institutions, hereafter referred to as CDFIs. The legislature finds that

CDFIs are currently providing effective lending and financial services

and fulfill a vital role in meeting the needs of New York state's low

and moderate income communities.

The legislature finds that the continued growth of CDFIs requires an

established support structure in order to build capacity in these

institutions. The legislature further finds that creation of a statewide

CDFI fund will strengthen these institutions, allowing them to expand

their mission of addressing the credit and banking needs of low and

moderate income communities in New York state.

2. Definitions. As used in this section, the following terms shall

have the meanings indicated:

(a) "Community Development Financial Institution" or "CDFI" means an

organization located in this state which has been certified as a

community development financial institution by the federal community

development financial institutions fund, as established pursuant to 12

U.S.C. 4701 et seq.

(b) "Fund" means the community development financial institutions fund

as established by subdivision three of this section.

(c) "Investment area" means a geographic area that:

(i) is economically distressed as defined in section sixteen-d of this

act; and

(ii) has significant unmet needs for loans or encompasses or is

located in a federally designated empowerment zone or enterprise

community as established pursuant to title XIII of the federal Omnibus

Budget Reconciliation Act of 1993 (Pub.L. 103-66) or a designated empire

zone as defined pursuant to article eighteen-B of the general municipal

law.

(d) "Low income" means having an income, adjusted for family size, of

not more than:

(i) for metropolitan areas, eighty percent of the area median income;

and

(ii) for non-metropolitan areas, the greater of eighty percent of the

area median income or eighty percent of the statewide non-metropolitan

area median income.

(e) "Targeted population" means individuals or an identifiable group

of individuals who are low income persons or otherwise lack adequate

access to loans.

3. Establishment and purposes. The corporation shall establish a fund

to be known as the "community development financial institutions fund"

and shall pay into such fund any monies made available to the

corporation for such fund from any source. The monies held in or

credited to the fund shall be expended solely for the purposes set forth

in this section. The corporation shall not transfer the monies of such

fund to any other fund or monies of the corporation or any monies held

in trust by the corporation. The corporation is authorized, subject to

available funding, including, but not limited to, available

appropriations, to provide financial and technical assistance to

community development financial institutions that make loans and provide

development services to specific investment areas or targeted

populations.

4. Applications for assistance. An application for assistance shall be

submitted in such form and in accordance with such procedures as the

corporation shall establish. Applications submitted to the fund may

include but not be limited to:

(a) A business plan;

(b) An analysis of the needs of the investment area or targeted

population and a strategy for addressing those needs;

(c) An explanation of proposed activities, and information on how they

are consistent with any existing economic, community, and housing

development plans adopted by or applicable to an investment area or

targeted population;

(d) A description of how the applicant will coordinate with community

organizations and financial institutions and leverage private sector

investments, including, but not limited to, loans, secondary markets, or

other services to the investment area or targeted populations;

(e) In the case of an applicant with a prior history of serving

investment areas or targeted populations, a demonstration that the

applicant:

(i) has a record of success in serving investment areas or targeted

populations; and

(ii) will expand its operations into a new investment area or to serve

a new targeted population, offer more products or services, or increase

the volume of its current business;

(f) A description of how the applicant will provide financial services

for community businesses that employ or will create jobs for low income

persons or to businesses that are owned by low income persons, or

enhance the availability of products and services to low income persons;

and

(g) Any additional information that the corporation shall require.

5. Selection of CDFIs. In the awarding of assistance, the corporation

shall select from eligible CDFI applicants based on criteria that may

include:

(a) The likelihood of success of the applicant in meeting the goals of

its strategic plan;

(b) The experience and background of the CDFI's board of directors or

management team;

(c) The extent of need for loans and development services within the

investment areas or targeted populations;

(d) The extent of economic distress within the investment areas or the

extent of need within the targeted populations;

(e) The extent to which the proposed activities will expand economic

opportunities within the investment areas or targeted populations;

(f) The extent of support from the investment areas or targeted

populations;

(g) The extent of the applicant's current and planned community

involvement;

(h) The extent to which the applicant will increase its resources

through coordination with other institutions or participation in a

secondary market;

(i) In the case of an applicant with a prior history of serving

investment areas or targeted populations, the extent of success in

serving such areas or populations; and

(j) Other factors deemed to be appropriate by the corporation.

6. Assistance provided by the corporation. The corporation may

provide:

(a) Financial assistance through deposits, credit union shares, loans,

and grants.

(b) Technical assistance and training to any CDFI regardless of

whether or not it receives or has received financial assistance from the

fund. Monies from the fund may be used for activities that enhance the

capacity of a CDFI, such as training of management and other personnel,

and development of programs, investment, or loan products. Such

technical assistance and training may be provided:

(i) directly;

(ii) through grants; or

(iii) by contracting with organizations that possess expertise in

community development finance, without regard to whether or not the

organizations receive or are eligible to receive assistance under this

section.

7. Uses of financial assistance. A CDFI which files an application and

is approved by the corporation for financial assistance may use such

assistance for the following purposes:

(a) the development of commercial facilities that promote

revitalization, community stability, and the creation or retention of

jobs;

(b) the development or improvement of community facilities;

(c) the provision of basic financial services;

(d) housing that is principally affordable to low income people,

except that assistance used to facilitate home ownership shall only be

used for services and lending products that serve low income people and

are not provided by other lenders in the area or that complement the

services and lending products provided by other lenders in the area;

(e) the development or support of businesses that:

(i) provide jobs for low income people or are owned by low income

people, women, or minority entrepreneurs; or

(ii) enhance the availability of products and services to low income

people; or

(f) the development or support of other businesses and activities

deemed appropriate by the corporation.

8. Advisory committee. The corporation may create an advisory

committee, consisting of at least five members, to advise the

corporation in the promotion, implementation and administration of the

community development financial institutions program. Such members shall

have experience with CDFIs and shall, to the extent practical, reflect

diversity in geographic location and communities served.

9. Reporting requirements. The corporation shall submit a report to

the governor, the speaker of the assembly and the temporary president of

the senate on or before the first of October, and annually thereafter,

describing the financial and technical assistance provided pursuant to

this article, including: the number of CDFI applications filed and

accepted; the amount and type of assistance provided; a description of

projects financed or assisted by fund monies; the number of jobs created

or retained through the investment of fund monies; the amount and source

of funds leveraged; and such other information as the corporation may

deem appropriate.

10. Rules and regulations. The corporation is hereby authorized to

promulgate rules and regulations in accordance with the state

administrative procedure act that are necessary to fulfill the purposes

of this section.