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Director Gambrell Keynote Speaker at National Capital Access Forum

May 12, 2009

Financing Minority Businesses in Challenging Economic Times
National Capital Access Forum
Washington, DC
May 12, 2009


Thank you for that kind introduction and it’s an honor to be here today.  I serve as the Director of the Community Development Financial Institutions (CDFI) Fund, an agency of the U.S. Department of the Treasury, promoting economic development and opportunities for organizations, including minority businesses, across the country.  The CDFI Fund’s mission is very similar to the objectives of this Capital Access Forum - to expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and economically distressed communities within the United States.  As such, I welcome the opportunity to speak before you here today, and to discuss our shared vision, by showing you the ways in which we are committed to seeing minority-owned enterprises succeed.

Before I begin however, I would like share a brief story.  A few weeks ago, I had the opportunity to visit Detroit and Lansing, Michigan, for a two-day trip to view firsthand how the CDFI Fund’s New Markets Tax Credit (NMTC) Program is providing needed jobs and support to local businesses.  It would be very difficult for me now to describe the economic conditions that I saw firsthand during my visit, but what stood out the most was the entrepreneurial spirit of the small business that was remarkably resilient. a network of Detroit charter schools, known as University Preparatory Academy.  Recently refurbished through a $10 million New Markets Tax Credit investment, the school now has an enrollment of more than 1,600 students in grades K through 12, nearly 70 percent of whom are eligible for free or reduced lunches.  The school’s goal is to enable 90 percent of its graduates to be accepted at a university, community college or technical school.  In order to allow for a more structured, hands-on approach to education, the class size is limited to 16 for the elementary school and 17 for the high school. “none of us got where we are solely by pulling ourselves up by our bootstraps.”  How true his words ring today.  In January, we all saw firsthand how one individual took on enough risk to last a lifetime to break a very significant barrier.  non-profit financial institution that provides for the protection of financial assets, access to loans, financial independence and financial education. may be used to finance a wide variety of activities in low-income communities, including loans to or investments in businesses.  Strategies range from microenterprise lending to multi-million dollar venture capital investments, in investments ranging from small, locally owned businesses to major manufacturers and retail operations looking to locate in low-income communities.

I saw the remarkable success of this spirit when I visited

As Director, it’s very rewarding for me to see firsthand the results of our work.  My staff and I took the opportunity to have lunch with the children, as we were interested in hearing what they thought of their new school.  I was particularly impressed by a young girl named Blessed, who had learned the lesson of community development all too well, as she offered to use her lunch card to pay for my meal.  Stories like that just make you appreciate the job you do all the more.

Supporting the Financing of Small Businesses

Thurgood Marshall once said that

With the change in Administration, the CDFI Fund has experienced significant growth through the funding made available in the Recovery Act, and the President’s fiscal year (FY) 2010 budget that is requesting more than double our annual FY 2009 appropriations.

Today, the CDFI Fund is more committed than ever, and has more resources than ever, to expand our efforts to all small business lenders, especially those among minority populations.  For example, the state of North Carolina has seen a dramatic rise in its Hispanic population.  According to U.S. Census Bureau figures for 2000, North Carolina has a Hispanic population of 378,963, a nearly 400 percent increase from 1990.  Hispanics currently account for 7 percent of that state’s population.

The Hispanic population has become an important part of North Carolina’s economy.  They provide labor for agriculture, construction, and manufacturing industries across the state.  During the 1990s, the number of Hispanic-owned businesses doubled in North Carolina.  As the demographics continue to change, so too must the lending community.

The CDFI Fund has been a longtime supporter of CDFIs serving North Carolina that are providing business loans to the growing Hispanic population.  The Latino Community Credit Union, for example, has received nearly $4 million in awards under the CDFI Program since the year 2000.  Based in Durham, they serve as a

The CDFI Fund’s New Markets Tax Credit Program is also supporting small businesses meet their objectives.  The program allows investors to receive a tax credit against their Federal income by investing in what are known as Community Development Entities (CDEs).  These investments

The NMTC application process is extremely competitive.  Historically, only one out of four applicants has received an award, and in any given application round, requests for tax credit authority have been between six and nine times greater than what is available to award.  As a result, in each round, many qualified applicants have not received awards, or received awards in amounts much smaller than their requests.  Relatively few minority CDEs have applied for allocation awards.  In the past four allocation rounds, only 88 out of 934 applicants, or just over 9 percent of the total application pool, were identified as minority CDEs.

While that may not seem like a huge percentage, it is important to consider another perspective.  New Markets Tax Credits in those census tracts where minorities are the majority population have accounted for nearly 50 percent of all allocations since 2004.   In 2007 alone, more than $1.7 billion dollars was allocated through the program to census tracts wherein minorities make up the majority of the population, a figure representing more than half of the $3.3 billion total for that year.

I am here today because the CDFI Fund wants to work more closely with the Department of Commerce’s Minority Business Development Agency, which we hope will also lead to additional applications from minority CDEs.  We have presented information about the NMTC Program, and other CDFI Fund initiatives, at the forum yesterday and today.  In July, the CDFI Fund will also be participating in the FDIC’s Interagency Minority Depository Institution National Conference.  These efforts are in addition to the outreach we conduct on a regular basis with other Federal agencies, the bank regulatory agencies, trade associations and other industry representatives to increase minority participation in all our programs.

CDFI Success Stories

Later this year, the CDFI Fund will celebrate its 15th anniversary.  Over the years, we’ve had many success stories, such as WomenVenture, a small and emerging CDFI based in St. Paul, Minnesota.  WomenVenture was formed in 1989 when its parent companies merged, bringing more than ten years of combined experience in helping women explore entrepreneurial possibilities.  The original idea was to create a single agency that could address the wide range of economic, training and career issues affecting women today.

As the name suggests, WomenVenture is a female-owned and operated business aimed at helping other women find their own economic self-sufficiency.  Every year, they assist more than 5,000 women, 20 percent of whom are minorities, do just that, through the use of micro-loans.  They also offer such needed services as career counseling and assessment testing.

The CDFI Fund is also proud to be a long time supporter of Shorebank Enterprise Cleveland (SEC), a triple-bottom line non-profit CDFI.  Shorebank’s main goal is to foster the successful growth of minority-owned businesses in and around Northeast Ohio.  More than half of their clients (53 percent) are African-American.  An additional 20 percent are Hispanic.

One of their Cleveland area success stories is Lefco Industries, LLC, a company that manufactures custom crates, pallets, and steel racks.  They also provide a variety of  assembly services for the merchants and residents who make up the local business community. 

When owner Larry Fulton, himself an African-American, bought the firm in 2003, it had only three employees and even fewer customers.  The one thing it had the most of was debt.  Larry came to Shorebank and immediately qualified for debt refinancing, at a rate more manageable than his own bank could ever provide.  Today, Lefco Industries employs 17 people, and it provides shipping services to several Fortune 100 companies.  The economy may be in recess, but you wouldn’t know it at Lefco, whose business is continuing to grow.

Additionally, the CDFI Fund’s programs have benefitted Fresno CDFI, a California based lending agency that opened its doors in 1994.  More than 90 percent of their clients are Asian, most of whom are farmers.

Fresno CDFI’s programs have helped many recent immigrants achieve their version of the American dream.  Included among their many success stories is a Laotian refugee named Bounthone Lokham, who came to America in 1980, seeking a better life following the long and drawn-out Vietnam War.  Having spent his entire life as a farmer, Lokham decided to put those skills to good use and open up his own small enterprise.  He was unsure however, where to begin.

Lacking the basic capital needed for his new venture, Mr. Lokham sought out Fresno CDFI, who were more than willing to offer him their support.  Their assistance enabled him to jumpstart his dream, and today, he runs a 14-acre farm and is self-sufficient.  Business goes well, and he will soon be adding eight additional greenhouses, which will only increase productivity.


The CDFI Fund is committed to giving support to communities and financial institutions to support minority owned businesses that have historically been underserved.  Never before in the history of the CDFI Fund have we been in such a strong position to be able to support and serve you.  As the new Congress and the new Administration put their support behind the CDFI Fund, we will, in turn, provide our support to you.

Thank you for inviting me here today.  We look forward to fostering new relationships and bringing your economic success stories to fruition.

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