February 24, 2022
GOVERNOR HOCHUL ANNOUNCES FORMATION OF ADVISORY COUNCIL TO SUPPORT INSTITUTIONS THAT LEND IN COMMUNITIES OF COLOR
Announces Proposal to Partner with CDFIs to Deliver $150 Million to Small Businesses Most in Need Upon Federal Approval of Plan
Holds Financial Empowerment Roundtable to Support Black and Brown Communities with Dr. Hazel Dukes, NAACP New York State Conference President
Governor Kathy Hochul today hosted a roundtable in the Bronx focused on how New York State can spur economic recovery in Black and brown communities with NAACP President Dr. Hazel Dukes, and announced new efforts to fight structural racism embedded in the financial system and support innovative community lending programs and economic development services focused on reaching communities of color. The event brought together community leaders, Community Development Financial Institutions, Minority Depository Institutions, Credit Unions and small business owners.
"The pandemic has impacted communities of color disproportionately, expanding the racial wealth gap and exposing the structural racism embedded in our financial system that has prevented New Yorkers from achieving economic prosperity," Governor Hochul said. "It is critical that we open lines of communication, lift up the organizations on the frontlines of this work, and work together to find the most effective solutions. My administration is committed to supporting community lender institutions that bring financial tools and services to underserved communities, and this new advisory council will help ensure our economic recovery from the pandemic is fair and equitable for all New Yorkers."
CDFIs and MDIs are mission-driven financial institutions that play a critical role in delivering access to financial services and products to historically underserved and underbanked communities, particularly communities of color.
At the event, Governor Hochul announced her plan for the State to partner with CDFIs to deliver more than $150 million of funding to small businesses most in need, upon federal approval of the State's plan. This is part of the Governor Hochul's FY2023 budget which proposed an unprecedented assistance package for small businesses that includes over $500M to New York State through the federal State Small Business Credit Initiative over the next several years. Reaching those small businesses most in need will require working closely with our partners on the ground, including CDFIs, MDIs, and credit unions. Empire State Development Acting Commissioner and President and CEO-designate Hope Knight will work with community leaders to administer these funds upon federal approval of the State's plan.
Governor Hochul also announced a new advisory council of New York State-chartered CDFIs and MDIs to be led by DFS Superintendent Adrienne Harris. This new council will elevate the specific concerns of New York CDFIs and MDIs to support communities of color and ensure their needs are met. As a working and active forum, the new council will discuss ways to modernize regulations and support these institutions to better serve their communities.
Empire State Development Acting Commissioner and President and CEO-designate Hope Knight said, "New York State's CDFIs served as a lifeline for many small businesses during the COVID-19 pandemic, providing critical capital assistance and connecting traditionally underserved businesses to state and federal funding. Under Governor Hochul's leadership, they will continue to play an important role as we push for a more inclusive and full economic recovery."
Department of Financial Services Superintendent Adrienne Harris said, "CDFIs and MDIs are a vital catalyst to building wealth in minority communities and ensuring a sustainable financial system that works for all New Yorkers. The Department of Financial Services Advisory Council will provide an important forum for our New York State chartered CDFIs/MDIs, and allow the Department of Financial Services to work in tandem with these institutions to support the establishment and growth of small businesses, driving employment and economic activity throughout our State."
This work builds on Governor Hochul's $1 billion plan to support small businesses. This plan will invest in the growth and retention of small businesses of the future, small business tax credits for businesses that took on COVID-related expenses, seed funding to establish new businesses, provide flexible grants to early-stage small businesses, expand small business lending, and help small businesses secure contracts. Upon federal approval of New York State's plan under the State Small Business Credit Initiative passed as part of The American Rescue Plan Act, submitted to the U.S. Treasury earlier this month, the Administration will work with CDFIs to deliver millions in funding to small businesses most in need. The Governor also discussed the State's continuing commitment to provide $5 million in grants to CDFIs over five years to support access to safe and affordable banking services in historically underserved and low-income communities across New York State. DFS and ESD recently announced the first awards from the New York State Community Development Financial Institution Fund.
Senator James Sanders Jr. said, "As the Chairman of the Senate Committee on Banks, I am proud to support Governor Hochul in this endeavor that will help small business owners by reducing stifling regulations as well as increasing bank lending in underserved communities. This financial investment by the State is especially critical as New Yorkers struggle to return to pre-pandemic stability and growth."
Assemblymember Patricia Fahy said, "Lack of access to banking and financial services in our low-income and disadvantaged communities affects far too many New Yorkers, but especially our communities of color. CDFIs and MDIs play a critical role in empowering our historically disadvantaged communities by providing vital financial services and products to underbanked businesses, individuals, and more. As we seek new ways to make our banking and financial sectors more equitable, I welcome the creation of a new council to specifically address local concerns and support underbanked communities across New York State. I commend Governor Hochul for her leadership on this issue, and as Chair of the Assembly Banks Committee, I look forward to working with her to ensure that all of New York's communities-but especially those of color-are served equitably and justly in our banking and financial services sector."