PUSH Signs on to NYS Letter for Increase in Credit Union Support

By New Economy Project

February 15, 2019

Honorable Andrea Stewart-Cousins
Temporary President and Majority Leader, New York State Senate
188 State Street Room 907, Legislative Office Building
Albany, NY 12247

Re: Request to support $25 million for the NYS CDFI Fund in the final budget

Dear Temporary President and Majority Leader Stewart-Cousins:

The undersigned 65 organizations respectfully request your support for a $25 million appropriation to fund the New York State Community Development Financial Institution Fund (NYS CDFI Fund).

In 2007, New York State established a CDFI Fund—based on the successful federal CDFI Fund—to provide grants and investments to New York CDFIs, which serve New Yorkers and small businesses in economically-distressed communities throughout the state. New York’s was the first state-based CDFI Fund in the country. Unfortunately, the NYS CDFI Fund has yet to receive any funding from the state. Support for CDFIs is a sure-fire strategy for building strong local and regional economies and ensuring access to sound and affordable financial services throughout New York State.

As you know, mainstream banks are not adequately meeting the financial services needs of New York’s low-income and immigrant communities and communities of color. When asked how interested banks are in serving their households, approximately one-quarter of black and Latino New Yorkers respond, ‘Not at all,’ compared to just 13% of white New Yorkers with this response.1 Over the years, payday lenders and other high-cost financial services companies have sought to exploit this gap, including by pressing New York to legalize usurious lending.

New York is one of 16 states, plus Washington, D.C., that effectively prohibits payday lending. In states where predatory payday lending is permitted, lower-income people of color make up a disproportionately large segment of borrowers. And older adults, including Social Security recipients who are prime targets for payday lenders, are an especially fast-growing segment of payday loan borrowers. Notwithstanding extensive litigation and enforcement actions by the New York State Attorney General and Department of Financial Services to crack down on illegal payday lending – and despite vehement, ongoing pushback by labor, civil rights, community, faith-based, and consumer groups – the industry has persisted in its flagrant effort.

Meanwhile, New York’s CDFIs, including Community Development Credit Unions (CDCUs), are providing affordable financial services and making equitable investments in low-income and immigrant communities and communities of color throughout the state.

With 82 CDFIs serving every county in the state, New York has the second highest concentration of CDFIs in the country. New York’s CDFIs provide equitable financial services in neighborhoods not served by mainstream banks, helping low-income New Yorkers establish savings and credit, and build wealth. They also support New York’s small businesses – the economic lifeblood of many low-income and immigrant neighborhoods and neighborhoods of color – providing vital loans, investments, financial services, and financial counseling.

Community Development Credit Unions (CDCUs), in particular, help low-income families build assets by providing savings vehicles, consumer credit, and home mortgages. Because CDCUs are community-based financial cooperatives, they contribute to neighborhood economic security and preserve money and resources in the communities they serve, especially low-income communities of color and immigrant communities.

In 2015 alone, New York CDFIs provided $2.5 billion in financing to more than 100,000 New Yorkers, including to individuals, small business owners, affordable housing developers, and others. CDFIs offer tremendous bang-for-buck: Because CDFIs leverage every public dollar with 12 additional dollars from other sources, the proposed $25 million budget allocation would leverage more than $300 million in direct lending and services to New York’s underserved communities.

Strengthening New York’s CDFIs is a central plank of the NYS Community Equity Agenda, an affirmative platform for advancing financial justice and economic democracy throughout NYS—and represents a critical counterweight to recent efforts to legalize predatory payday and other high-cost lending in New York.

For all the reasons stated above, we strongly urge you to support a $25 million allocation in the FY2020 budget to the NYS CDFI Fund.Thank you for your consideration.

Sincerely,

AARP
Adirondack North Country Association
Align
ANHD
Banana Kelly Community Improvement Association
The Black Institute
Brooklyn Cooperative Federal Credit Union
Brooklyn Legal Services Corporation A
Brooklyn Movement Center
BWICA Education Fund, Inc.
Carroll Gardens Association
The Center for Family Life
Center for NYC Neighborhoods
Chhaya CDC
Communication Workers of America, District One
Community Development Project at Urban Justice Center
Cooperation Buffalo
Cooperative Federal
Cypress Hills Local Development Corporation
Erasmus Neighborhood Federation, Inc.
Faith in New York
The Financial Clinic
Fiscal Policy Institute
Fordham Law School Feerick Center for Social Justice
Genesee Co-op FCU
Good Old Lower East Side (GOLES)
Habitat for Humanity New York City
Habitat for Humanity New York City Community Fund
Housing and Family Services of Greater New York, Inc.
Inclusiv (formerly The National Federation of Community Development Credit Unions)
Interfaith Center on Corporate Responsibility
JASA/Legal Services for the Elderly in Queens
Latino Justice PRLDEF
The Legal Aid Society
LISC NYC
Long Island Housing Services, Inc.
Long Island Progressive Coalition
Lower East Side People’s FCU
Mobilization for Justice, Inc.
Neighborhood Trust Financial Partners
New Economy Project
New York City Anti-Violence Project
New York City Network of Worker Cooperatives
New York Communities for Change
New York StateWide Senior Action Council
New Yorkers for Responsible Lending
NY Working Families
NYC Employment and Training Coalition
NYPIRG
Pan-African Community Development Initiative
Partnership for the Public Good
PUSH Buffalo
Restaurant Opportunities Center of New York
South Bronx Unite
Teamsters Local 237
Tompkins County Workers’ Center
Ujima Co., Inc.
Unemployment Action Center
Urban Homesteading Assistance Board
The WASH Project
Westchester Residential Opportunities, Inc.
Western New York Law Center
The Working World

cc:
The Honorable Liz Krueger, Chair, NYS Senate Finance Committee
The Honorable Anna Kaplan, Chair, NYS Senate Commerce, Economic Development, and Small Business Committee
The Honorable James Sanders, Jr., Chair, NYS Senate Banks Committee
The Honorable Kevin Thomas, Chair, NYS Senate Consumer Protection Committee