CDFI Fund Releases CDFI Bond Guarantee Interim Rule

CDFI Fund Releases CDFI Bond Guarantee Interim Rule

AEO Suggestions Incorporated into Much-Anticipated Announcement

February 5, 2013 – Today, the Community Development Financial Institutions (CDFI) Fund announced new regulations for the CDFI Fund’s Bond Guarantee Program (CBGP) in the Federal Register.  Created by the Small Business Jobs Act of 2010 (PL 111-240), the CBGP represents a critical opportunity to expand access to capital to entrepreneurs. 

In August 2011, the Association for Enterprise Opportunity (AEO) submitted comments to the CDFI Fund on the proposed structure of the CBGP, recommending that three principles should guide the design and implementation of the CBGP: sustainability, flexibility, and innovation. AEO is pleased that the CBGP interim rule announced today reflects those principles.  We applaud the CDFI Fund on its work and dedication to the success of the CBGP and we look forward to continued collaboration with the CDFI Fund. 

AEO plans to comment on the interim rule in the coming weeks, ensuring that the final program regulations meet the needs of the smallest of businesses.  The comment window will remain open 60 days from today.

 

Background

Through the CDFI Fund’s Bond Guarantee Program, eligible Community Development Financial Institutions (CDFIs) will be able to issue bonds that are guaranteed by the Federal government and use the bond proceeds to extend credit to the broader CDFI industry for community development purposes and for long-term community investments.

The Department of the Treasury is authorized to guarantee up to ten bonds per year, each at a minimum of $100 million, with a total of up to $1 billion in bonds guaranteed per year. 

 

Additional Resources

Interim Rule (February 5, 2013)

Original Request for Comments (July 1, 2011)

AEO Comments on the CDFI Bond Guarantee Program in the Federal Register (August 15, 2011)

CDFI Fund’s Bond Guarantee Program website

CDFI Bond Alliance (OFN)

The Carsey Institute – Community Development Finance