Community Development Capital Initiative

The Community Development Capital Initiative, announced in February 2010, makes low-interest loans to smaller community banks, with certain strings attached, such as that the bank lend the funds out instead of hoarding them. The Treasury has converted some of the Capital Purchase Program loans into Community Development Capital Initiative loans for eligible institutions, though the CDCI has also made independent loans. CDCI loans would be preferable to CPP loans, as CDCI have an interest rate of 2 percent, compared to 5 percent for CPP loans.

Press and industry reports say the Obama administration said the program would be capped at $800 million.

The CDCI is considered a TARP program by Treasury. In its monthly TARP reports to Congress, Treasury lists these conversions from CPP to CDCI loans as disbursements under both programs.

Funding agency and aid type
The funding agency was the Treasury Department.

The funds were an investment/loan.

Who benefits
Banks (who are able to loan the funds to businesses at a higher interest rate than they are charged by Treasury) and small businesses (who get increased access to capital).

Related SourceWatch articles

 * SIGTARP Quarterly Report to Congress July 21, 2009
 * Troubled Asset Relief Program