financial institutions, including cdfis, provided more paycheck protection program ( ppp ) loans to borrowers in low - and moderate - income communities and majority - minority communities than their traditional counterparts. 3 growth in demand for cdfi products and services therefore, it is encouraging to see that the industry is growing both in terms of number of certified cdfis and total assets held. from 2018 to the start of 2023, the number of certified cdfis rose 40 percent and assets have nearly tripled, according to research from the federal reserve bank of new york. 4 interest in cdfi products and services also continues to grow. the federal reserve bank of richmond's 2023 cdfi survey indicates that nearly three - quarters of cdfi respondents experienced an increase in demand for their products from 2022 to 2023. 5 2 / 5 bis - central bankers'speeches cdfis are especially adept at leveraging capital - with some programs leveraging $ 8 in private - sector investment for every $ 1 of public funding. 6 that leverage helps meet this growing demand. despite growth in demand, many cdfis still face challenges in today's economic environment, especially as it relates to meeting the needs of the communities they serve. i emphasize that the communities cdfis serve are ones that were disproportionately impacted by business and school closures as well as negative health outcomes resulting from the pandemic. they also have been among the most affected by recent inflation. i would like to highlight three specific issues that cdfis are struggling with, as identified by the federal reserve bank of richmond's cdfi survey. first, demand is outpacing the supply of capital. while there has been an influx of federal funding for cdfis, much of that is tied to pandemic - related relief programs and other programs with specific purposes. therefore, building out long - term sources of capital is a continuing challenge. one hopeful strategy is selling loans on secondary markets. new research from the federal reserve bank of new york shows that cdfis sell billions of dollars of loans each year but tend not to do so systematically. also, residential mortgage loans account for almost all the volume sold by cdfis. as such, there is likely substantial room for growth. 7 later in today's program, you will hear more about opportunities for cdfis to explore options, such as pooling and securitizing loans to expand their access to capital

lisa d cook : growth and change at community development financial institutions speech by ms lisa d cook, member of the board of governors of the federal reserve system, at the expanding access to capital for cdfis event, hosted by the federal reserve bank of new york, new york city, 14 may 2024. * * * thank you, jack. and thank you to the federal reserve bank of new york for hosting this timely event. it is good to be back at the new york fed where i conducted research on financial institutions as a dissertation fellow over two decades ago. your recent research on the community development financial institution ( cdfi ) industry is a welcome prelude to today's conversation. a lot of thoughtful, interesting research is also being produced by other reserve banks on this topic, some of which i will highlight today. let me start by saying it is a great honor for me to be among those doing this important work every day. you help to encourage and strengthen the financially and economically vulnerable, and to create economic opportunity that benefits them and our broader economy. cdfis are a subject i know something about, and care about a great deal. i personally know the impact these financial institutions have in communities, having previously served on the board of rende progress capital, a cdfi in grand rapids, michigan. it is also wonderful to see that many more americans are becoming aware of cdfis. a cdfi in arkansas, people trust, was featured in the 2023 short film " the barber of little rock. " that documentary was nominated for an oscar at this year's academy awards. in the film, the founder talks about how the people trust name is inspired by potential borrowers, some of whom had been turned away by other institutions and want to prove they are trustworthy, creditworthy, and able to run successful businesses. it is exciting to see the stories of cdfis reaching new audiences in such an auspicious way. cdfis are having a moment off the silver screen, too. a significant portion of the federal funding directed to community development activities during the height of the pandemic flowed through cdfis. these investments exemplify how cdfis can meet increased demand while managing rapid growth through expanded capitalization. 1 addressing the funding needs of cdfis has also helped to elevate awareness of the critical services these institutions provide. today, i will speak about the crucial role cdfis play in their communities, the challenges they