This October, Community Development Financial Institution (CDFI) practitioners gathered at the Opportunity Finance Network (OFN) conference to celebrate big milestones: the conference marked OFN’s 40th anniversary, 2024 is the 30th anniversary of the national CDFI fund, and 2025 will be the 50th anniversary of credit unions. Now an industry with billions of dollars from the federal government poised to deploy in communities across the country, community finance is entering what OFN CEO Harold Pettigrew called the “Third Wave of CDFIs.”

Unlike this year’s conference of more than 2,500 attendees, OFN’s first gathering in the early 1980’s consisted of a handful of dedicated community lenders. These organizations saw themselves as primarily grassroots financial activists. “We were really an ad-hoc coalition of community lenders,” shared Cliff Rosenthal, co-founder of the CDFI movement and author of Democratizing Finance: Origins of the Community Development Financial Institutions Movement. “We asked the White House to enlarge your idea of what a bank is,” he shared, pointing to the work done by Black banks that catalyzed the formation of the federal CDFI Fund in 1994.

OFN President & CEO Harold Pettigrew, Jr.

The CDFI industry has been largely shaped by a few catalytic moments like the creation of the Federal Fund. In 2022, the US Senate Community Development Finance Caucus was created under bi-partisan leadership to increase capacity for CDFIs, and since then states like Virginia and California have cemented CDFI Funds at the state level. Now, CDFIs are faced with the monumental task of deploying the billions of dollars intended for communities as part of post-COVID initiatives — particularly the $27 billion Greenhouse Gas Reduction Fund (GGRF), created under the Inflation Reduction Act (IRA).

OFN members alone have already been awarded $1.63 billion from the GGRF, and the implications of this funding was top of mind across the October conference. In the coming years OFN will be an important intermediary between policymakers and the CDFIs deploying this capital.

“Policy and advocacy are a core part of OFN’s identity as a membership and trade organization. OFN builds strong bipartisan relationships with policymakers and advocates for robust federal support to create a policy environment that addresses the needs of local communities,” shared Dafina Williams, Head of Government Affairs at OFN.

CDFIs are uniquely positioned to be partners for both larger financial institutions and local community organizations.

OFN’s conference theme, “Made by History, Made for this Moment”, reflected the reckoning of a social movement turned financial industry. Dan Letendre, CDFI Lending and Investments at Bank of America, referred to CDFIs as “financial first-responders” in his plenary remarks. His words highlight how CDFIs are uniquely positioned to be partners for both larger financial institutions and local community organizations. But as many leaders are quick to point out, maintaining this balance is critical for the CDFI industry as it continues to scale to ensure capital reaches the people and communities that need it most.

Speakers across the conference emphasized that the road ahead for CDFIs has to be collaborative — between funders, banks, communities, small business owners, and the public sector. The CDFI sector has developed robust infrastructure over the last 40 years, diversifying its leadership and financial tools. The success of the “Third Wave” will rely on that infrastructure to ensure capital gets to the communities and projects that need it most.

OFN CEO Harold Pettigrew shares that he hopes OFN can facilitate more partnerships and act as an intermediary across the industry, including between private and public partners. “Moving into the next 40 years, OFN will continue to look for ways to help CDFIs do their best work. Our role is to pay attention to where the momentum is while building structures that can accelerate and support capital deployment into communities.”