Gwin, Vanderhoofven offer thoughts on Executive Order related to Community Development Financial Institution Fund
The two seasoned veterans of the program offer their thoughts on the program which was fully funded in the recently passed Continuing Resolution.
A week or so ago, SSTI published an article about a recent Executive Order (EO) from the White House that it said could jeopardize the Community Development Financial Institution (CDFI) Fund and put at risk investments in small businesses. The EO calls for the “non-statutory components and functions” of several governmental entities, among them are the CDFI and the Minority Business Development Agency, “to be eliminated … and such entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”
We reached out to two longtime players in the CDFI space – Clint Gwin, President and Chief Executive Officer (CEO) of Nashville-based Pathway Lending, and Grady Vanderhoofven, President and CEO of Knoxville-headquartered Three Roots Capital, for their thoughts on the potential impact.
Gwin responded that “I think the article lays out the CDFI industries case very well. I agree that what the CDFI fund does is statutory and was recently fully funded in the CR (Continuing Resolution) which included FA (financial assistance) and TA (technical assistance) grants to CDFIs. From a statutory perspective, I think the CDFI Fund and CDFIs are going to be ok. The other portion of the EO stated “minimum statutory level” which I am afraid may mean some staff reductions at the CDFI Fund. From our perspective, we are continuing to operate as usual.”
On Thursday, Vanderhoofven and Three Roots posted a much longer item on its LinkedIn page. It read as follows:
“In light of the President’s recent executive order regarding the Community Development Financial Institutions Fund (CDFI Fund), there has been concern about how potential changes with the CDFI Fund, or with CDFIs in general, might affect the communities we serve. While the order aims to reduce federal bureaucracy and eliminate ‘the non-statutory components and functions’ of the CDFI Fund, I want to reassure our partners and clients that Three Roots Capital remains strong and fully operational. #3Roots continues to raise capital from bank partners, provide critical capital to small businesses and projects, support affordable housing initiatives, and drive economic growth in low-income and rural communities. We believe 3Roots’ activities are entirely consistent with the ‘statutory components and functions’ of the CDFI Fund, and 3Roots remains committed to our mission in the midst of the evolving policy landscape. The CDFI Fund has been instrumental in fostering public-private partnerships, and this fact has been widely recognized at all levels of government and across numerous trade associations and advocacy groups. We appreciate the recent and long-standing bipartisan support for CDFIs and will continue working to ensure that small businesses and entrepreneurs in our region have access to the resources they need to thrive.”
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