On June 27th, small banks serving America’s impoverished communities were recognized by the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund with $22.8 million in Bank Enterprise Awards (BEA Awards). The Awards had been at risk as a result of the Trump Administration’s proposed $15 billion rescission package, which failed to pass by its 45-day deadline of June 22, 2018. The failure of this package resulted in the Awards’ long-awaited release to a record-breaking 113 banks and thrifts headquartered in 23 states and the District of Columbia.
The BEA Program is a performance-based incentive that banks compete to receive based on documented increases in lending and services in economically distressed communities. Awards received are used to support new activity in these areas. Over a year-long assessment period, the 113 recipients to the 2017 BEA Awards reported:
- a $470.4 million increase in their loans and investments in distressed communities;
- a $18.6 million increase in their loans, deposits, and technical assistance to CDFIs;
- a $7.3 million increase in the provision of financial services in distressed communities; and
- a $2.5 million increase in their equity and equity-like loans and grants to CDFIs.
These loans and financial services help encourage entrepreneurial activity, job creation, homeownership, and safe small dollar lending options for low-income communities.