FY 2021 Omnibus/COVID Relief Bill Includes Unprecedented $12 Billion for CDFIs, MDIs

Published by Bob Ibanez on Tuesday, December 29, 2020 - 12:00AM

Legislation passed by Congress on Dec. 21 and signed into law by President Trump on Dec. 27 includes an unprecedented $12 billion set-aside for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). Specifically, the stimulus section includes:

  • $9 billion to establish a $9 billion Emergency Capital Investment Program (ECIP), administered by the Department of the Treasury, to provide low-cost, long-term capital investments to MDIs and CDFIs that are depository institutions. To ensure that the smallest CDFIs and MDIs have access to the capital program, $4 billion will be set aside for institutions with under $2 billion in total assets, of which $2 billion will be set aside for institutions with under $500 million in total assets.
  • $3 billion in emergency support through the CDFI Fund to provide grants and other financial and technical assistance to CDFIs, including CDFI loan funds, as they serve consumers, small businesses and nonprofits in their communities responding to the coronavirus pandemic.

On Dec. 20, House Financial Services Chairwoman Maxine Waters, D-Calif., made the following statement regarding the support for CDFIs and MDIs in the Covid Relief Bill:

“CDFIs and MDIs are critical sources of capital and investment for our nation’s low-income communities and for communities of color and they need additional resources and tools to help them to support the communities they serve. The $12 billion in funding in this bill will allow CDFIs and MDIs to continue to support those communities and help them to recover from this crisis.”

In addition to the COVID relief bill support, the FY 2021 omnibus appropriations section of the legislation also included $270 million for the CDFI Fund, $8 million more than FY2020.


Rep. Waters also released a one-page summary on the provisions providing emergency support for CDFIs and MDIs in the Covid Relief Bill. That summary included the number of MDI banks (143 as of Sept. 30, 2020), MDI credit unions (509 as of June 30, 2020), and CDFIs (1,163 as of Dec. 16, 2020) with a similar mission of delivering affordable lending options to the economically disadvantaged, especially those in LMI and minority communities.

With respect to MDI banks, the Federal Deposit Insurance Corp. (FDIC) maintains a list and tracks the insured MDIs it supervises, i.e., state-chartered institutions that are not members of the Federal Reserve System (Federal Reserve), as well as MDIs that are supervised by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. As for MDI credit unions, the National Credit Union Administration (NCUA) maintains a list of minority depository institutions that are federally insured credit unions. The list of certified CDFIs maintained by the CDFI Fund includes regulated community development banks and credit unions, and non-regulated institutions like loan and venture capital funds.

Next Steps

The legislative language calling for the Treasury Secretary to begin accepting applications for capital investments under the Emergency Capital Investment Program not later than the end of the 30-day period beginning on the date of enactment suggests that it will be implemented rather quickly to respond to the COVID–19 pandemic. In the case of emergency support through the CDFI Fund, $1.25 billion of these funds will be available for the current fiscal year for the CDFI Fund to award grants and other financial assistance to help CDFIs serve their communities responding to the economic hardships created by the pandemic. The remaining $1.75 billion of these funds will be available until they are expended to provide additional grants and financial assistance to CDFIs. Of these funds, $1.2 billion are reserved for “minority lending institutions,” a new category of CDFIs that predominantly serve minority communities and are either MDIs or meet other standards for accountability to minority populations as determined by the CDFI Fund.


Learn more about Novogradac's expertise and many services