Finance Fund has been “hanging around” Ohio for twenty some years and has provided some tangible value to distressed communities and inspired changes that, but for its presence, would not have happened. Ohio is proud of what Finance Fund has done but continues to ask the question “Is this all you can do?” It is that constant question that drives us to spend time staring at the mission, searching for the “raison d’être” that moves us again toward the next metamorphic improvement. We aspire to be at the front of the pack, empowering and innovatively bringing resources to low-income communities. It must be acknowledged, whether in strategic agreement or not, that we have dramatically done that over the past 22 years.
Finance Fund’s vision and mission are quite straight forward yet allude to a dramatically different approach, a strategic construct in which systems not symptoms are targeted. This approach births a philosophy that puts emphasis on growing sustainable resources appropriately scaled for the demands of the market. It precipitates a strategy that demands innovation to tackle the challenges of economically distressed communities beyond the inadequate resources offered by public programs or the yield incentives that drive private sector investment.
Our “trademark” has been innovation, looking at things differently and responding “why not” instead of just “why.” From inception our legacy has evidenced this entrepreneurial approach. The Linked Deposit Fund was a groundbreaking innovation inciting bank participation in local projects. The Predevelopment and Economic Development grants have proved to be an innovative model for facilitating leveraged investment into local markets. The New Markets Tax Credit program, Intermediary Relending Program, the creation of Finance Fund Capital Corporation, CDFI certification, and a covey of innovative products are vivid evidence of our movement to fulfill our vision and mission for low-income people.
And now it is time to innovate again. At the September meeting Finance Fund’s Board of Directors approved a resolution authorizing the establishment and funding for the Bank Acquisition Steering Committee (BISC). BISC will implement a process to bring about the acquisition of a bank charter. This means we are moving toward being the majority stockholder of a commercial bank and as such become a bank holding company. This will mean we have to do some changing, some evolving. There will be some challenges, however we have decided we will not back away just because it is hard to do. The benefits to our clients will far out weight the difficulties. An affiliated commercial lender will allow us to bring some stability into the generation of capital, give us access to public sector guarantee programs, provide more flexibility in development of products, and expand growth potential and deployment opportunity not previously possible for Finance Fund. Notice I did not say it will allow us to change our purpose, our vision, or our mission. We will still be providing the same type of products and services to the same market and clients. With a very natural and intuitive repositioning we will be able to offer clients more without much change at all.
Over the next couple of years you can follow the progress of this and other Finance Fund initiatives right here.
Tags: CDFI, Finance Fund, New Markets, New Markets Tax Credit
Will you be pursuing membership in the Federal Home Loan Bank? We’ve found the AHP program is vital when LIHTC is not available.
Is it possible for you to become a member even before you become a bank? It would be so great to have a member bank to work with that understood how to evaluate community development projects.
We’re in the process of planning future projects. Shall we be talking to you as well as banks about construction financing and/or the AHP submission? Or is this way down the road?
The way the current regulations are drafted membership of a CDFI in the FHLB is predicated on several parameters. One of those is that a member applicant must have a history and portfolio of housing related assets; i.e. be a mortgage lender. It is not part of our strategy to move into being a primary retail credit resource; i.e. mortgage lending, car loan, personal saving/checking accounts, etc. It is unlikely that we will pursue FHLB membership within these parameters.
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[...] i.e. “Wisely, and slow. They stumble that run fast.” (William Shakespeare) These, like the bank initiative and the CDFI funding initiative, will be “blossoming” in 2010. To say we are excited is to [...]
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