Washington, D.C. – U.S. Senators Jack Reed and Sheldon Whitehouse and Congressmen Jim Langevin and David Cicilline today announced that the U.S. Department of the Treasury has awarded more than $2.87 million in COVID-19 relief funds to two community development financial institutions (CDFIs) in Rhode Island. The Providence Revolving Fund has been awarded $1.6 million and the Capital Good Fund received $1.278 million. The grants are made through Treasury’s CDFI Rapid Response Program to provide capital for loan funds to respond to economic challenges created by the COVID-19 pandemic, particularly in underserved communities.
“CDFIs offer affordable financial products to underserved communities, and the resulting small loans can have a big impact. These federal funds will help ensure that even more qualified working families have access to affordable loans,” said Senator Reed.
“Our community development financial institutions play an important role in filling the gaps left by traditional financial institutions,” said Senator Whitehouse. “This federal funding will provide more capital for low-cost loan programs – an alternative to the high-interest payday loans that can trap people in a cycle of debt – for residents of neighborhoods that were hardest hit by the health and economic effects of COVID-19.”
“Low-income families and underinvested neighborhoods bore the brunt of the COVID-19 pandemic, so I’m thrilled to deliver this federal funding for two RI community development financial institutions that provide access to capital to those who need it most,” said Rep. Langevin. “CDFI’s facilitate increased lending and provide financial services to working families, helping them get through the tough times and back onto secure economic footing. I thank the Treasury Department for making these funds available, and I look forward to continue championing CDFI’s and the great work they do every day.”
“The pandemic made it harder for many Rhode Island families to pay their bills,” Rep. Cicilline said. “These new federal grants will help many get back on their feet and make our entire economy stronger.”
The grant funds may be used to support eligible financial products, financial services, development services, and certain operational activities, and to enable CDFIs to build capital reserves and loan-loss reserves. The CDFI Fund designed the program to disburse the funds rapidly to counter the economic effects of the COVID-19 pandemic. The CDFI Rapid Response Program was authorized by the Consolidated Appropriations Act of 2021.
“This nearly $1.3 million grant will help us dramatically scale up our efforts to help low-income families recover from the economic consequences of the pandemic,” said Capital Good Fund’s Founder and CEO, Andy Posner. “Over the past 15 months, we have served 2,500 families with Crisis Relief Loans, financial coaching, and other products that have helped keep people afloat during this challenging time. We will be able to leverage the new funding from the CDFI Fund to deploy at least $5 million in new loans to several thousand low-income families across our seven-state footprint, including roughly 1,000 Rhode Islanders. Borrowers will use the loans for security deposits, paying off high-interest debt, car repair, residential energy-efficiency upgrades, buying laptops and school supplies, and other essential expenses. We are deeply thankful for the funding and to Congress’s support of CDFIs like us nationwide.”
“We are delighted to be the recipient of $1.6 million in CDFI Rapid Response Funds,” said Carrie Zaslow, Executive Director of the Providence Revolving Fund. “These funds will allow us to increase lending focused on stimulating property redevelopment in underinvested neighborhoods, facilitating opportunities for all households to live in areas of high opportunity, and incentivizing developers to participate in filling the need for affordable units in Rhode Island. We are grateful for the continued support of Senator Reed, Senator Whitehouse, Congressman Langevin, and Congressman Cicilline.”
