N.Y. UDA Law § 16-O — New York Code / Act UDA / Section 16-O
The community development financial institutions program
Status: in_force

§ 16-o. The community development financial institutions program. 1.\nLegislative intent. The legislature hereby finds that credit, banking\nservices, and investment capital are vital to the revitalization of\ncommunities and neighborhoods throughout the state. The legislature\nfurther finds that many communities with the greatest potential for\ngrowth and the greatest need for jobs and investment lack access to the\nservices and capital of traditional banking and lending institutions.\nThe legislature further finds that access to banking services and\ncapital can be improved through a growing network of alternative\nfinancial service providers known as community development financial\ninstitutions, hereafter referred to as CDFIs. The legislature finds that\nCDFIs are currently providing effective lending and financial services\nand fulfill a vital role in meeting the needs of New York state's low\nand moderate income communities.\n  The legislature finds that the continued growth of CDFIs requires an\nestablished support structure in order to build capacity in these\ninstitutions. The legislature further finds that creation of a statewide\nCDFI fund will strengthen these institutions, allowing them to expand\ntheir mission of addressing the credit and banking needs of low and\nmoderate income communities in New York state.\n  2. Definitions. As used in this section, the following terms shall\nhave the meanings indicated:\n  (a) "Community Development Financial Institution" or "CDFI" means an\norganization located in this state which has been certified as a\ncommunity development financial institution by the federal community\ndevelopment financial institutions fund, as established pursuant to 12\nU.S.C. 4701 et seq.\n  (b) "Fund" means the community development financial institutions fund\nas established by subdivision three of this section.\n  (c) "Investment area" means a geographic area that:\n  (i) is economically distressed as defined in section sixteen-d of this\nact; and\n  (ii) has significant unmet needs for loans or encompasses or is\nlocated in a federally designated empowerment zone or enterprise\ncommunity as established pursuant to title XIII of the federal Omnibus\nBudget Reconciliation Act of 1993 (Pub.L. 103-66) or a designated empire\nzone as defined pursuant to article eighteen-B of the general municipal\nlaw.\n  (d) "Low income" means having an income, adjusted for family size, of\nnot more than:\n  (i) for metropolitan areas, eighty percent of the area median income;\nand\n  (ii) for non-metropolitan areas, the greater of eighty percent of the\narea median income or eighty percent of the statewide non-metropolitan\narea median income.\n  (e) "Targeted population" means individuals or an identifiable group\nof individuals who are low income persons or otherwise lack adequate\naccess to loans.\n  3. Establishment and purposes. The corporation shall establish a fund\nto be known as the "community development financial institutions fund"\nand shall pay into such fund any monies made available to the\ncorporation for such fund from any source. The monies held in or\ncredited to the fund shall be expended solely for the purposes set forth\nin this section. The corporation shall not transfer the monies of such\nfund to any other fund or monies of the corporation or any monies held\nin trust by the corporation. The corporation is authorized, subject to\navailable funding, including, but not limited to, available\nappropriations, to provide financial and technical assistance to\ncommunity development financial institutions that make loans and provide\ndevelopment services to specific investment areas or targeted\npopulations.\n  4. Applications for assistance. An application for assistance shall be\nsubmitted in such form and in accordance with such procedures as the\ncorporation shall establish. Applications submitted to the fund may\ninclude but not be limited to:\n  (a) A business plan;\n  (b) An analysis of the needs of the investment area or targeted\npopulation and a strategy for addressing those needs;\n  (c) An explanation of proposed activities, and information on how they\nare consistent with any existing economic, community, and housing\ndevelopment plans adopted by or applicable to an investment area or\ntargeted population;\n  (d) A description of how the applicant will coordinate with community\norganizations and financial institutions and leverage private sector\ninvestments, including, but not limited to, loans, secondary markets, or\nother services to the investment area or targeted populations;\n  (e) In the case of an applicant with a prior history of serving\ninvestment areas or targeted populations, a demonstration that the\napplicant:\n  (i) has a record of success in serving investment areas or targeted\npopulations; and\n  (ii) will expand its operations into a new investment area or to serve\na new targeted population, offer more products or services, or increase\nthe volume of its current business;\n  (f) A description of how the applicant will provide financial services\nfor community businesses that employ or will create jobs for low income\npersons or to businesses that are owned by low income persons, or\nenhance the availability of products and services to low income persons;\nand\n  (g) Any additional information that the corporation shall require.\n  5. Selection of CDFIs. In the awarding of assistance, the corporation\nshall select from eligible CDFI applicants based on criteria that may\ninclude:\n  (a) The likelihood of success of the applicant in meeting the goals of\nits strategic plan;\n  (b) The experience and background of the CDFI's board of directors or\nmanagement team;\n  (c) The extent of need for loans and development services within the\ninvestment areas or targeted populations;\n  (d) The extent of economic distress within the investment areas or the\nextent of need within the targeted populations;\n  (e) The extent to which the proposed activities will expand economic\nopportunities within the investment areas or targeted populations;\n  (f) The extent of support from the investment areas or targeted\npopulations;\n  (g) The extent of the applicant's current and planned community\ninvolvement;\n  (h) The extent to which the applicant will increase its resources\nthrough coordination with other institutions or participation in a\nsecondary market;\n  (i) In the case of an applicant with a prior history of serving\ninvestment areas or targeted populations, the extent of success in\nserving such areas or populations; and\n  (j) Other factors deemed to be appropriate by the corporation.\n  6. Assistance provided by the corporation. The corporation may\nprovide:\n  (a) Financial assistance through deposits, credit union shares, loans,\nand grants.\n  (b) Technical assistance and training to any CDFI regardless of\nwhether or not it receives or has received financial assistance from the\nfund.  Monies from the fund may be used for activities that enhance the\ncapacity of a CDFI, such as training of management and other personnel,\nand development of programs, investment, or loan products. Such\ntechnical assistance and training may be provided:\n  (i) directly;\n  (ii) through grants; or\n  (iii) by contracting with organizations that possess expertise in\ncommunity development finance, without regard to whether or not the\norganizations receive or are eligible to receive assistance under this\nsection.\n  7. Uses of financial assistance. A CDFI which files an application and\nis approved by the corporation for financial assistance may use such\nassistance for the following purposes:\n  (a) the development of commercial facilities that promote\nrevitalization, community stability, and the creation or retention of\njobs;\n  (b) the development or improvement of community facilities;\n  (c) the provision of basic financial services;\n  (d) housing that is principally affordable to low income people,\nexcept that assistance used to facilitate home ownership shall only be\nused for services and lending products that serve low income people and\nare not provided by other lenders in the area or that complement the\nservices and lending products provided by other lenders in the area;\n  (e) the development or support of businesses that:\n  (i) provide jobs for low income people or are owned by low income\npeople, women, or minority entrepreneurs; or\n  (ii) enhance the availability of products and services to low income\npeople; or\n  (f) the development or support of other businesses and activities\ndeemed appropriate by the corporation.\n  8. Advisory committee. The corporation may create an advisory\ncommittee, consisting of at least five members, to advise the\ncorporation in the promotion, implementation and administration of the\ncommunity development financial institutions program. Such members shall\nhave experience with CDFIs and shall, to the extent practical, reflect\ndiversity in geographic location and communities served.\n  9. Reporting requirements. The corporation shall submit a report to\nthe governor, the speaker of the assembly and the temporary president of\nthe senate on or before the first of October, and annually thereafter,\ndescribing the financial and technical assistance provided pursuant to\nthis article, including: the number of CDFI applications filed and\naccepted; the amount and type of assistance provided; a description of\nprojects financed or assisted by fund monies; the number of jobs created\nor retained through the investment of fund monies; the amount and source\nof funds leveraged; and such other information as the corporation may\ndeem appropriate.\n  10. Rules and regulations. The corporation is hereby authorized to\npromulgate rules and regulations in accordance with the state\nadministrative procedure act that are necessary to fulfill the purposes\nof this section.\n