Governor Hochul Affirms Commitment to Advancing Affordability and Access to Financial Services in Underserved Communities

Governor Kathy Hochul today announced new guidance from the New York State Department of Financial Services (DFS) allowing state-chartered banks to receive Community Reinvestment Act (CRA) credit for lending to or investing in Community Development Financial Institutions (CDFIs) - even if their 2024 federal certification has lapsed. This action will help safeguard critical investments in CDFIs which can be used to expand access to affordable housing, small business financing, and other vital services within minority communities.

"Every New Yorker - no matter where they live - deserves access to affordable and reliable financial services and the resources they need to build a brighter future," Governor Hochul said. "While Republicans in Washington work to undermine Community Development Financial Institutions and strip away critical investments in working families, New York is charting its own path. The Department of Financial Services' new guidance strengthens our support for CDFIs, empowering them to fuel small business growth, open doors to homeownership, and expand opportunity in neighborhoods that have too often been overlooked. By building on our strong record of investments and providing certainty in uncertain times, we are advancing affordability and prosperity for every New Yorker."

New York State Department of Financial Services Superintendent Adrienne A. Harris said, "CDFIs are on the frontline of helping underrepresented New Yorkers access capital and credit, driving economic growth, boosting employment, and building wealth. The Department is proud to continue to support CDFIs as part of its mission to build a more equitable financial system for all New Yorkers."

Today's action follows a recent convening of CDFIs, Minority Depository Institutions (MDIs), and senior representatives from New York's largest banks to discuss measures to strengthen these institutions and ensure continued access to capital for underserved communities. This guidance makes clear that CDFIs that experience federal CDFI Fund certification lapses unrelated to their programs or mission have an avenue for continued funding, helping to ensure that federal uncertainty does not destabilize community-based institutions. By providing certainty for banks and CDFIs, New York is ensuring that mission-driven lenders can continue to attract and deliver critical services in neighborhoods often overlooked by traditional financial institutions.

In addition to today's DFS action, Empire State Development has built a strong track record of supporting CDFIs across New York, awarding nearly $18 million in grants to CDFIs over the last five years. ESD also leveraged $500 million in federal funding allocated through the State Small Business Credit Initiative to establish ten new capital access and equity programs for small businesses, including several that distribute capital in partnership with CDFIs. Already, ESD has allocated $35.5 million to 16 CDFIs through the Small Business Revolving Loan Fund 2.0 and another $18.2 million to 7 CDFI partners through the Contractor Financing Program. Collectively, these efforts have helped thousands of New Yorkers - particularly unbanked and underbanked individuals and small businesses and microbusinesses - open bank accounts, receive technical assistance, and access affordable credit to build wealth and stability in their communities.

New York is home to more than 80 certified CDFIs and 46 MDIs, which collectively provide billions of dollars in mortgages, small business loans, and community development projects that drive economic growth and financial inclusion.

Empire State Development President, CEO and Commissioner Hope Knight said, "Community Development Financial Institutions are vital partners in ensuring that every New Yorker, no matter their zip code, has access to affordable credit and financial services. Under Governor Hochul's leadership, Empire State Development has invested tens of millions of dollars to strengthen CDFIs and empower them to deliver capital, training, and opportunity in communities too often overlooked by traditional banking. Today's action reinforces that commitment and ensures these mission-driven lenders can continue to help small businesses grow, families build wealth, and neighborhoods thrive."

Senator Charles Schumer said, "From Buffalo to Albany, the CDFI Fund is used to build new homes, reduce housing costs, improve healthcare, start new businesses, and rebuild Main Streets across New York. This new guidance will help expand access to financial services for all New Yorkers, from new families trying to buy their first home to entrepreneurs starting and expanding small businesses. With programs like this under attack by Trump's budget cuts, it is more important than ever to protect existing investments and keep support flowing to New York's Main Streets and the middle class. I am grateful for Governor Hochul's partnership in ensuring financial services are available to all New Yorkers."

State Senator James Sanders Jr. said, "I applaud Governor Kathy Hochul for her initiative in supporting Community Development Financial Institutions (CDFIs). We need to ensure New York CDFIs are healthy and effective since they play a critical role in improving access to underserved communities."

Assemblymember Al Stirpe said, "CDFIs are critical gateways for underserved communities to grow, bridging the gap between economic barriers and opportunities that would otherwise be out of reach under traditional banks. For the 80 and rising CDFIs across New York State, every investment into a CDFI translates into an investment for stimulating small businesses, promoting homeownership, and encouraging all communities to thrive in the economic mainstream."

Assemblymember Clyde Vanel said, "I commend Governor Hochul and the Department of Financial Services for their work to ensure that vital investments continue to flow into our communities. Community Development Financial Institutions are essential for small businesses, first-time homebuyers, and families who lack access to traditional banking services. This guidance will provide local economies the stability and certainty they need to grow and it will expand opportunity for all New Yorkers."

Assemblymember Marianne Buttenschon said, "This action by DFS ensures that our mission-driven lenders can continue serving the families and small businesses that traditional banks too often overlook. In the Mohawk Valley, CDFIs are vital partners for first-time homebuyers, small contractors, and local entrepreneurs. Without this measure, our CDFIs would lose access to critical funding not due to any fault of their own, but to federal uncertainty. I appreciate the efforts of the agency as well as the Governor to provide stability and fairness, and to ensure the continuance of these important institutions."

This announcement builds on Governor Hochul's ongoing commitment to affordability and equity, ensuring that New York continues to lead the way in supporting mission-driven financial institutions and the communities throughout New York who rely on them.

Contact the Governor's Press Office