Governor Kathy Hochul has announced new guidance from the New York State Department of Financial Services (DFS) that will allow state-chartered banks to receive Community Reinvestment Act (CRA) credit for lending to or investing in Community Development Financial Institutions (CDFIs), even if those CDFIs have experienced a lapse in their 2024 federal certification. This measure is intended to protect investments in CDFIs and support access to affordable housing, small business financing, and other services in minority communities.
“Every New Yorker — no matter where they live — deserves access to affordable and reliable financial services and the resources they need to build a brighter future,” Governor Hochul said. “While Republicans in Washington work to undermine Community Development Financial Institutions and strip away critical investments in working families, New York is charting its own path. The Department of Financial Services’ new guidance strengthens our support for CDFIs, empowering them to fuel small business growth, open doors to homeownership, and expand opportunity in neighborhoods that have too often been overlooked. By building on our strong record of investments and providing certainty in uncertain times, we are advancing affordability and prosperity for every New Yorker.”
Superintendent Adrienne A. Harris of the DFS stated, “CDFIs are on the frontline of helping underrepresented New Yorkers access capital and credit, driving economic growth, boosting employment, and building wealth. The Department is proud to continue to support CDFIs as part of its mission to build a more equitable financial system for all New Yorkers.”
The updated guidance follows recent meetings with CDFIs, Minority Depository Institutions (MDIs), and representatives from major banks aimed at strengthening these organizations’ ability to provide capital within underserved areas. The policy clarifies that CDFIs facing lapses in federal certification unrelated to their operations or mission can still be eligible for funding from state-chartered banks. This aims to reduce the impact of federal uncertainty on community-based lenders.
Empire State Development (ESD) has provided nearly $18 million in grants over five years to support CDFIs across New York State. Additionally, ESD has used $500 million from the State Small Business Credit Initiative for new programs benefiting small businesses—many operated with CDFI partnerships. Through initiatives like the Small Business Revolving Loan Fund 2.0 ($35.5 million allocated) and Contractor Financing Program ($18.2 million allocated), thousands—including unbanked individuals—have gained access to banking services, technical assistance, and affordable credit.
There are currently more than 80 certified CDFIs and 46 MDIs operating statewide that collectively offer billions of dollars through mortgages, loans for small businesses, and community development projects supporting economic inclusion.
Hope Knight, President & CEO of Empire State Development said: “Community Development Financial Institutions are vital partners in ensuring that every New Yorker, no matter their zip code, has access to affordable credit and financial services. Under Governor Hochul’s leadership, Empire State Development has invested tens of millions of dollars to strengthen CDFIs and empower them to deliver capital, training, and opportunity in communities too often overlooked by traditional banking. Today’s action reinforces that commitment and ensures these mission-driven lenders can continue to help small businesses grow, families build wealth, and neighborhoods thrive.”
Senator Charles Schumer added: “From Buffalo to Albany, the CDFI Fund is used to build new homes, reduce housing costs, improve healthcare, start new businesses,and rebuild Main Streets across New York.This new guidance will help expand access to financial services for all New Yorkers ,from new families tryingto buy their first home,to entrepreneurs startingand expanding small businesses.With programs like this under attack by Trump’s budget cuts,it is more important than everto protect existing investmentsand keep support flowingto New York’s Main Streetsandthe middle class.I am gratefulfor Governor Hochul’s partnershipin ensuring financial servicesare availableto allNew Yorkers.”
State Senator James Sanders Jr., Assemblymember Al Stirpe , Assemblymember Clyde Vanel ,and Assemblymember Marianne Buttenschon also voiced support,saying this action will help ensure continued investment into underserved communities,and stability forthe institutions serving them.
This announcement continues Governor Hochul’s focus on affordability,equity,and supporting mission-driven lenders throughout the state.
