Governor Kathy Hochul has announced that the New York State Department of Financial Services (DFS) has issued new guidance allowing state-chartered banks to receive Community Reinvestment Act (CRA) credit for lending to or investing in Community Development Financial Institutions (CDFIs), even if their 2024 federal certification has lapsed. The measure aims to protect ongoing investments in CDFIs, which support affordable housing, small business financing, and essential services in minority communities.
“Every New Yorker — no matter where they live — deserves access to affordable and reliable financial services and the resources they need to build a brighter future,” Governor Hochul said. “While Republicans in Washington work to undermine Community Development Financial Institutions and strip away critical investments in working families, New York is charting its own path. The Department of Financial Services’ new guidance strengthens our support for CDFIs, empowering them to fuel small business growth, open doors to homeownership, and expand opportunity in neighborhoods that have too often been overlooked. By building on our strong record of investments and providing certainty in uncertain times, we are advancing affordability and prosperity for every New Yorker.”
Adrienne A. Harris, Superintendent of the Department of Financial Services, stated: “CDFIs are on the frontline of helping underrepresented New Yorkers access capital and credit, driving economic growth, boosting employment, and building wealth. The Department is proud to continue to support CDFIs as part of its mission to build a more equitable financial system for all New Yorkers.”
The DFS guidance follows a recent meeting between CDFIs, Minority Depository Institutions (MDIs), and senior representatives from major banks across New York focused on strengthening these organizations’ capacity to provide capital in underserved communities. Under this guidance, CDFIs facing federal certification lapses unrelated to their programs or mission will still have pathways for continued funding.
Empire State Development (ESD) has also played a role by awarding nearly $18 million in grants over five years to CDFIs throughout New York State. ESD used $500 million from the State Small Business Credit Initiative’s federal allocation to establish ten new capital access and equity programs for small businesses—some run with CDFI partners—and distributed $35.5 million through the Small Business Revolving Loan Fund 2.0 as well as $18.2 million through the Contractor Financing Program.
New York currently has over 80 certified CDFIs and 46 MDIs supporting billions of dollars in community development projects.
Hope Knight, President and CEO of Empire State Development said: “Community Development Financial Institutions are vital partners in ensuring that every New Yorker, no matter their zip code, has access to affordable credit and financial services. Under Governor Hochul’s leadership, Empire State Development has invested tens of millions of dollars to strengthen CDFIs and empower them to deliver capital, training, and opportunity in communities too often overlooked by traditional banking. Today’s action reinforces that commitment and ensures these mission-driven lenders can continue to help small businesses grow, families build wealth, and neighborhoods thrive.”
Senator Charles Schumer commented: “From Buffalo to Albany, the CDFI Fund is used to build new homes, reduce housing costs, improve healthcare, start new businesses, and rebuild Main Streets across New York. This new guidance will help expand access to financial services for all New Yorkers… With programs like this under attack by Trump’s budget cuts it is more important than ever to protect existing investments… I am grateful for Governor Hochul’s partnership in ensuring financial services are available to all New Yorkers.”
State Senator James Sanders Jr., Assemblymember Al Stirpe, Assemblymember Clyde Vanel,and Assemblymember Marianne Buttenschon also expressed support for the move.
“This announcement builds on Governor Hochul’s ongoing commitment to affordability and equity,” according to her office.
