Governor Cuomo Announces a 2020 Statewide Proposal for CDFIs

At the beginning of this new decade, we shared our 2020 vision: To continue to explore ways we can invest our dollars responsibly, so more people have access to the financial tools they need to build wealth. Thankfully, we aren’t standing alone in this work. We proudly share our mission of financial inclusion with the 83 other US Treasury Certified Community Development Financial Institution Funds (CDFl’s)– mission-driven financial institutions, banks, credit unions, and nonprofits–in New York State. And, Governor Cuomo does too.

Governor Cuomo recently announced the “21st Proposal of his 2020 State of the State: Expanding Access to Safe and A/fordable Financial Services.” In partnership with CDFls, his proposal includes the following strategies:

  • $25 million in new funding over five years to increase access to affordable financial products in underserved communities across New YorkState through, New York’s Community Development Financial Institutions Fund (CDFI)
  • The launch of a statewide “Office of Financial Inclusion and Empowerment” as a single-stop provider of financial services and providers across housing, student loan, debt, and general financial literacy
  • The expansion of access to safe and affordable banking services, credit and financial education, particularly for women and communities of color, typically excluded from the current financial systems.

To execute these strategies, Governor Cuomo proposes to work with CDFls, who, like us, are often the sole providers of banking and other financial products and services in low-income communities. Under the Governor’s proposal, participating CDFls will leverage this funding, providing upwards of $300 million in targeted investment in underserved communities in New York for consumers, affordable housing, and small businesses.
Governor Cuomo’s vision includes expanding access to low-cost bank accounts to low-income New Yorkers who often find that the only accessible banking service in their communities are high-cost check cashers who take huge finance fees out of people’s paychecks. According to the FDIC, approximately 25 percent of New York households do not have bank accounts or seldom use one and rely on costly non-bank services for their financial activities. Expanding financial literacy education and access to microcredit for small businesses is also part of the proposal.
In a press release announcing his strategies, Governor Cuomo acknowledged the prevalence of exploitation by predatory lenders in low-income communities in New York:

“We’ve made significant strides expanding access to banking services for low income New Yorkers, but too many people still live in banking deserts,” Governor Cuomo said. “As a result, these New Yorkers often turn to costly check-cashing services or take out illegal predatory payday loans because they can’t access affordable small business loans at community banks. These sweeping proposals will provide New Yorkers with the services they need to build their credit, improve financial literacy, and take charge of their economic futures – helping build a fairer and stronger New York.”

Linda MacFarlane, the Executive Director of CDFI, Community Loan Fund of the Capital Region and chair of the New York State CDFI Coalition of which we are a proud member, has been discussing the proposal with the Governor’s office, the New York State Department of Financial Services and Empire State Development Corp. and has “high hopes” for the Governor’s new proposal.

We do too. We are proud to serve New York City as one of 83 CDFIs in the state who helped shape the New York State CDFI Fund to expand access to safe and affordable products. Creating access to credit and wealth-building financial tools for communities typically excluded is why we headquartered in the Bronx—and why we continue to explore ways in which to serve New York City as a mission-driven, ethical bank.

We invite you to join us in the mission. 

Register for this year’s NY State CDFI Conference in Albany, March 30-31st. You will learn more about how you can join CDFIs in making a difference every day in New York, State. Invest your dollars locally with us. Open a Green Checking account with us today. When you bank in your community, you support the credit and wealth-building of your neighbors and local businesses.

Read our 2020 Vision and follow us on LinkedIn, where we share stories about what it means to be an ethical bank, and our vision for a shared and durable prosperity for all.

Hester Street Community Building Photo Credit: Hester Street

What does a neighborhood shaped by its people look like? How do communities take ownership over their schools, their streets, and how they change and develop? And how do we create the B Corp movement’s vision of a “shared and durable prosperity for all?”

This is what Hester Street, an urban planning, design, and development nonprofit, is committed to understanding and building. With a mission to create equitable, sustainable, and resilient neighborhoods and cities, Hester Street works to ensure neighborhoods are shaped by the people who live in them. They are laser-focused on understanding and elevating the needs of New York City neighborhoods by lifting up local knowledge and shifting power back into communities.

“Our work is to shift power from traditional government makers to people who work and live in their communities, the people who know best,” says Betsy MacLean, Executive Director of Hester Street. “We work to make sure people have a meaningful part in the future of their communities.”

A mixed team of urban planners, architects, and developers, Hester Street’s multifaceted work includes a combination of technical planning, design, and development with deep, meaningful community engagement. The result is increased civic participation and funding for projects that directly address community-identified needs and priorities. For example, they are currently engaging in a multi-stakeholder process with people in Bushwick and Harlem, where the city is rezoning neighborhoods. The goal is to avoid animosity and more importantly, inequitable decision-making.

“We map out the communication process so that the planning teams are talking to the community groups who are talking to the cops, parks, sanitation, developers and property owners,” explains Betsy. “With this process, we outline the equity choice points.”

Equity choice points include ensuring kids who live on the same block go to the same schools and creating finance opportunities for community organizations so they can own property.  Via their Technical Assistance for Community-Based Organizations (CBOs) program, they seek to buy, build, or renovate spaces to root organizations as community anchors of culture and critical service provision in their neighborhoods for the long-term. Through this program, they work with CBOs from project visioning to ribbon cutting to ensure built projects meet the needs of residents, strengthen key community institutions, and preserve cultural identity. This results in what Betsy calls “neighborhood preservation.”

“We help community groups secure a mortgage for their spaces instead of giving their money to landlords. This, in turn, helps to ensure community organizing—and the voice of residents– stays in their neighborhoods forever,” says Betsy.

Hester Street coordinates direct education from cohorts of community groups to municipalities so that before top-down decisions are made the possibility of course correcting for historical injustice–like redlining—is addressed. As Betsy describes it, low-income communities and communities of color are “plowed over by planners and developers.”

“We are not neutral. We have a very clear mission. We are about equity. We serve low-income and communities of color exclusively. History shows that wealthy white neighborhoods will take care of themselves. Our mission is to make sure that people who aren’t usually in the room—are there,” Betsy explains.

And their impact is expansive. In 2017, Hester Street engaged 300,000+ residents in shaping projects and plans; developed 200,000 square feet of community facility space: libraries, community centers, open space; and developed 22 plans and addressed ten urban health issues in partnership with 55 community-based organizations.

When we met Betsy and her team at Hester Street, we immediately knew we shared a mission and vision for New York City. Through our Community Impact Program, designed to meet the funding gap needs for nonprofit organizations, Hester Street secured a $200,000 line of credit. They use the line of credit as reserves to get them through funding gaps and months where cash flow is tight. Betsy explains that they had a hard time finding the right lender.

“As a non-profit, our search for a lender was exhaustive. Everywhere we looked we found onerous terms including sky-high interest rates and monthly fees. Just when we were about to give up our search, we found Spring Bank. Not only did they understand what we needed, they offered us reasonable loan terms – in other words, they did not punish us because we are a non-profit,” says Betsy.

Unfortunately, this isn’t news to us. Many traditional lenders avoid lending to nonprofits because of the lack of collateral or gaps in funding. But we know they are key to thriving communities. Through our Community Impact Program, we offer flexible underwriting and customized terms specific to nonprofit organizations. And, we always waive maintenance fees. We think those giving the most should be rewarded the most.

“I wish I’d known about Spring Bank a long time ago,” says Betsy. “Run, don’t walk to Spring Bank! They offer the tools you need to ensure the efficient, effective operation of your organization; deep understanding of the non-profit context, and; they are working to advance positive social change in neighborhoods throughout the city. We deeply appreciate knowing that our money is in the hands of a responsible steward.”

We are very proud to partner with Hester Street as both their local bank and a community ally. Read more about how you can uplevel your civic engagement with them. Join them on June 13th from 6 to 10 pm for their annual benefit gathering. Learn about our nonprofit lending opportunities, our personal checking accounts, and our online banking.