The Community Development Financial Institutions Fund (CDFI Fund) is currently seeking information from Certified Community Development Financial Institutions (CDFIs), Federally Insured Depository Institutions, trade organizations, and the general public about the Small Dollar Loan Program (SDLP).
Authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), SDLP was established to provide grants for Loan Loss Reserves (LLRs) and Technical Assistance (TA) to enable Certified CDFIs to establish and maintain small dollar loan programs. Small dollar loans are defined as loans that do not exceed $2,500. Program funding is intended to help Certified CDFIs provide an alternative to high-cost small dollar loans. It is also intended to help unbanked and underbanked populations build credit, access affordable capital, and allow greater access into the mainstream financial system.
The CDFI Fund received $5 million for the SDLP under the Consolidated Appropriations Act, 2020 (P.L. 116-93). The first Notice for Funding Availability (NOFA) and Application are anticipated to be released in fiscal year 2021. Eligible applicants, per the SDLP statute (12 U.S.C. § 4719), will be limited to Certified CDFIs and partnerships between such Certified CDFIs and any other Federally Insured Depository Institution with a primary mission to serve targeted Investment Areas. An applicant can request SDLP grants for LLRs, TA, or both. SDLP grants cannot be used to provide direct loans to consumers.
The CDFI Fund is currently seeking information regarding, but not limited to, the following:
- the characteristics of small dollar loan program policies and practices;
- the proposed definitions of key terms for the CDFI Fund’s SDLP;
- the SDLP program Application, including what questions should be asked regarding the consumer need and environment, track record, business plan, and technical assistance strategy of the applicants;
- the minimum and maximum award sizes for the SDLP;
- the impact of regulatory requirements and restrictions on SDLP applicants;
- the specific types of entities eligible to apply to the SDLP, including Community Partnerships;
- the CDFI Fund’s evaluation criteria for measuring a successful Application to the SDLP; and the CDFI Fund’s performance goals, compliance, and reporting requirements for the SDLP.
Please review the Request for Information in the Federal Register for the complete list of topics that the CDFI Fund is seeking input on regarding the Small Dollar Loan Program. Comments should be submitted via email to Mia Sowell, Acting Program Manager, Small Dollar Loan Program, CDFI Fund, at firstname.lastname@example.org, or via Service Request in the Awards Management Information System, by September 10, 2020 to be considered by the CDFI Fund.