The NMTCC is a national membership organization representing Community Development Entities (CDEs) and investors working with the NMTC program. The Coalition was formed in 1998 with the principal purpose of advocating for the enactment of a federal tax credit to spur economic development in underserved areas. The Coalition works to ensure that the NMTC program can effectively be used to attract private capital and generate economic development in poor communities.

On Wed., April 21, we proudly hosted several state legislators, community leaders and Finance Fund project partners at the Capital Club in downtown Columbus. It was an excellent opportunity to share how Finance Fund has positively impacted some of the state’s most distressed communities.

We highlighted four partnership “success stories,” including Ohio Basic Minerals in Jackson; Save-a-Lot grocery store in Columbus; Noble Learning Center in Caldwell; and Miami Valley Child Development Centers (MVCDC) in Dayton. Each project touted key Finance Fund goals – job creation, safe childcare access and neighborhood revitalization.

We shared important information about the New Markets Tax Credits (NMTC) program. Last October, we were awarded $50 million in NMTC funding, with $30 million designated specifically for non-metropolitan, rural areas in Ohio. Funding is still available for qualifying projects – we strongly urge those interested to contact us for more information on a possible partnership with us.

We thank our distinguished guests for their presence, and look forward to new partnerships that will lead to more jobs, revitalized communities and safer access to care.

1. Funding authority to catalyze high levels of private investment in distressed communities. The Administration proposes to authorize NMTC at $5 billion in 2010 and 2011.
2. Improving overall competitiveness, attractiveness and effectiveness of the NMTC.
   1. Allowing Alternative Minimum Tax (AMT) taxpayers to claim NMTC.
   2. Review passive activity rules, which is a rule that limits the use of losses and credits for business in which a taxpayer does not materially participate.
   3. Qualification of certain types of investments for the credit, which seeks to clarify what types of loans constitute a qualified investment.
   4. Improvement of NMTC rules to spur additional investment in small business.
      1. Re-examining “substantially all” requirements, which requires an awardee (CDE) to have a specific portion of their funds invested at all times.
      2. Supporting greater investment in institutions that invest in small businesses by supporting new rules to promote more investment in Community Development Financial Institutions (CDFIs).

In addition to the “formal” proclamation of the press release, on the conference call Treasury officials made concerted effort to point out that NMTC has Secretary Geithner’s support and is a high priority for the Administration. Bob Rapoza, representing the NMTC Coalition, expressed the industries appreciation that Treasury is moving aggressively on these issues that will strengthen the program.

It’s good to hear good news once in a while.

PRESS RELEASE and FACT SHEET:

http://treas.gov/press/releases/reports/nmtc%20fact%20sheet.pdf

This round of New Markets Tax Credit funding enables us to continue to invest in projects that support Ohio’s distressed communities. These projects help stimulate local economies through capital investment, job creation, and community development. You can read more about some of those projects here and here.

Join me in congratulating our team that has spent endless days and nights working on our NMTC application. Kudos to all of them in this successful effort that will benefit all Ohioans.

We have all heard how market conditions and increased competition have affected the health of Ohio’s community banking sector and the quality and availability of banking products and services. But in this economy, it’s imperative to find new ways to do business. Investing in Finance Fund’s New Markets Tax Credit (NMTC) program is one way to add to your bottom line, increase your CRA benefit and create economic development in your community.

Finance Fund works to enable progress and inspire change within Ohio’s low-income communities. Our clients include nonprofit organizations and for-profit businesses. The NMTC program is in line with Finance Fund’s mission to “…build bridges between resources and the low-income community.”  We do that by partnering with banks to provide credit to business borrowers (for-profit & nonprofit) for fixed assets in qualifying low-income census tracks. As our bank partner, your clients have access to capital with lower payments, you have a tool to share or lower risk, and your investment in the community builds assets giving rise to stronger businesses.

It’s simple really. The NMTC program permits taxpayers (that would be you) to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDE: that would be Finance Fund). These investments are then used by Finance Fund to provide credit for in development projects low-income communities.

These investments are used in low income census tract communities for business, real estate and community facility projects that create or retain jobs, stabilize neighborhoods and spurn further economic development, such as the Heritage Square Marketplace and Noble Learning Center.

Finance Fund has been using this program since 2004, and at the close of 2008 has leveraged $212 million on an investment of $44.5 million for 25 projects creating 1,249 full-time jobs and serving 536 children within Ohio’s low income communities.
We invite you to contact us today to find out more about how your community bank can invest with Finance Fund’s New Markets Tax Credit program.

The most prevalent is the recently release GAO report “Minority Entities Are Less Successful in Obtaining Awards Than Non-Minority Entities” that attempts to identify reasons for the lack of success. I have some opinions but will do more on that later.

Then it’s lunch with Rapoza Associates Friday, getting ready for the New Markets Tax Credit Coalition Board meeting on Monday, and preparing for the NMTC Coalition Policy Conference on Tuesday and Wednesday. The Coalition is working on a five-year extension of NMTC, a House version of which has been introduced by Rep. Neil and Rep. Tiberi (HR 2628).

Sprinkled into the mix are a number of Hill visits in the House and Senate talking about the Child Care Facilities Finance Act (HR 1685) introduced by Rep. McCarthy and the Senate companion (S 1002) dropped by Senator Casey. It all comes to a conclusion with my testimony (thanks to an invite by Rep. Tiberi) to the Subcommittee on Select Revenue Measures of the Committee on Ways and Means and the Subcommittee on Domestic Monetary Policy and Technology of the Financial Services Committee. I’ll be talking about the GAO report. Busy trip!

With the implementation of our CDFI strategy, which confers CDFI characteristics to one of our affiliates (Finance Fund Capital Corporation or FCAP), there was an opportunity for some funding to do a more in depth study of this market enabling us to frame, more definitively, our lending strategy. As part of moving toward CDFI certification for FCAP, the CDFI fund awarded funding to do a study of community lending.

In March the study, Financial Intermediaries For Community And Economic Development In Ohio: Market Assessment, was released by The Center for Economic Development & The Center for Housing Policy Research of the Maxine Goodman Levin College of Urban Affairs, Cleveland State University. The purpose of this research is to describe and quantify the needs of Finance Fund’s current and potential clients, identify the role the Fund’s partners play, and understand the market potential for the services provided by Finance Fund.  There weren’t a lot of surprises, but there were some impactful affirmations.

1.    The type of projects funded by partners includes commercial revitalization, community facilities, homeownership, and small business entrepreneurship.
2.    The study indicates that financial intermediaries seeking to expand their services can play a vital role in providing funding assistance to the organizations that need to fund projects in their respective communities.
3.    Some organizations that had used or attempted to use financial intermediaries in the past had difficulty in navigating through the application process, whereas other organizations were not sure how financial intermediaries could benefit them.
4.    The responding partners indicated a low level of collaboration with funding partners and intermediaries.  One reason may be unfamiliarity with financial intermediaries. Other reasons include staffing constraints, types of projects, geographic criteria, and real or perceived difficulty of partnering and constraints imposed by the intermediary.
5.    The study identifies a gap between the balance of activities revealed in the client survey and the available funding resources identified in the inventory. The inventory also offers possible funding avenues in new project areas where funding relationships have not yet been established. For example, the inventory identifies 25 sources for funding in the area of environmental programs and green communities.

The study’s overall conclusion is that there is room for financial intermediaries such as Finance Fund to do more marketing and provide more information to partners and organizations that may need their services. This was not a surprise but an affirmation, and is part of the reason you are reading about it in this forum. The complete market assessment will be published to our Web site, www.financefund.org in the next couple of months.

What if we spent just a little air time or political sound bites
around the relatively minimal increases in strategies that put dollars
directly on the street. The New Markets Tax Credit program will see a
$3 billion temporary increase and the Community Development Finance
Institution program a $100 million one year increase and a $200
million administrative budget increase enabling funds to flow directly
to main street America. These programs and others like them are a
small but critical part of doing what some of us have been doing for
some time, revitalizing the economy. Yet I’ve not heard a minute of
press time or political air time to focusing on what could work. It is
good to remember you can’t believe everything you hear.

Jim was recently selected to sit on the Board of Directors for the CDFI Coalition, a national organization representing community development institutions across the country. These institutions are certified CDFIs by the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund.

The CDFI Coalition is the unified national voice of community development financial institutions (CDFIs). Their mission is to encourage fair access to financial resources for America’s underserved people and communities. Nationwide, over 1000 CDFIs serve economically distressed communities by providing credit, capital and financial services that are often unavailable from mainstream financial institutions. CDFIs have loaned and invested billions in our nation’s most distressed communities and leveraged billions more from the private sector. The CDFI Coalition advocates on behalf of the CDFI industry and educates the public about community development finance. The CDFI Coalition is a primary source of information and knowledge about the CDFI field for the general public, the media, public officials, and private sector lenders.

“I am honored to join this growing Board of Directors as a representative of Finance Fund.’ he said.  “This collaboration of like-minded organizations from across the nation is poised to handle some of the toughest issues facing our communities today. The government is continuing to show its support of CDFIs by funneling stimulus dollars our way and looking to us for help with the economic challenges hitting our urban and rural neighborhoods.”

Well said, and congrats, Jim.

Also, CDFIs, a key player in local credit availability, have not yet been factored in to the equation. It is my opinion that the solution to our economic malstrom will come from the bottom up not the top down. Small business & small banks

There does seem to be a silver lining as Chairman Frank (Financial Institution Committee) starts hearings this week on stimulous funding for small business and consumers. Watch this one.