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Rep. Clarke Applauds Obama Administration for Supporting Lending in Underserved Communities

Today, U.S Treasury Secretary Timothy Geithner announced the terms of an initiative which will provide low cost capital to Community Development Financial Institutions (CDFIs). The initiative, announced initially in October, will allow CDFI banks, thrifts and credit unions to apply for capital investments at a low dividend rate of 2 percent.

“I am pleased that the Administration recognizes the need for these investments in institutions that provide services to families and small businesses in underserved areas,” said Rep. Clarke. “These areas are always in need of investment for community development purposes, but given the economic environment, these investments will go a long way to meeting the tremendous demand for capital in our hardest hit communities.”

On December 29, 2009, Rep. Clarke wrote a letter to Secretary Geithner and other Treasury officials urging them to make the Troubled Asset Relief Program (TARP) more inclusive of different kinds of CDFIs, including credit unions. This policy priority was ultimately reflected in the initiative which was announced today.

“I want to thank President Obama, Secretary Geithner and CDFI Director Donna Gambrell for heeding my call to make TARP available to different types of CDFI’s. They deserve credit for recognizing the urgent need for capital in underserved areas and acting now to address this pivotal issue.”

This CDFI announcement comes on the heels of yesterday’s announcement of the community bank small business lending initiative. The small business lending initiative would set aside $30 billion for lending to small businesses.

“This week, the Obama Administration demonstrated its commitment to improving the small business lending environment, especially in underserved areas. While this is a wonderful first step to helping financial institutions that operate in underserved areas, as a Member of the House Small Business Committee, I will be fighting to ensure that we strengthen CDFI’s and bolster economic growth in underserved communities,” concluded Rep. Clarke.