Community Development Financial Institution - CDFI
Categories: Education, Regulations
CDFIs are private banks dedicated to serving the low and moderate income population of their communities.
Think: a different kind of local "developing market."
Low-to-moderate income is classified as at or below 80% of the area’s median income (you can imagine what the CDFI is like in Atherton, CA, the wealthiest part of Silicon Valley). CDFIs are the financial backing involved in the production of low-income housing programs (both rental and owner occupied), economic development grants, and loans to start business in low and moderate communities, as well as other community betterment programs. Benevolent banking at its best.
Related or Semi-related Video
Finance: What is a merchant bank?4 Views
What is a merchant bank? Well there's the theoretical manner
in which the merchant bank came to the party and that was largely by providing [merchant bank partying in a disco club]
payment options escrow currency hedges and other means of spraying wd-40 on the [merchant bank holding escrow papers]
international tracts when American corporations did business with merchants [WD40 sprayed on train tracks]
from other countries well the basic idea then was that a merchant bank lived and [foreign merchants shaking hands]
breathed the banking international transaction universe and knew every [banks play pong across world map]
trick in the book when dealing with shady countries who had hoped that they
could get some gullible American corporation to ship them twenty five
thousand yellow and orange rubber duckies with the squeaky sound thingies [rubber duckies getting squeezed in the tub]
yeah and then somehow abscond without paying well the duck seller was schooled
in molding rubber they were not schooled in international financial transactions
so back then it made perfect sense for the duck maker to hire the merchant bank [merchant bank enters screen with duck maker]
to deal with international escrow complexities far beyond their core skill
and the way they hired them is basically the merchant bank would discount the
bill that was owed to them and pay that money in cash in American u.s. dollars [money changing hands]
to that American corporation and the bank would then be responsible for [bank choking international seller]
collecting the full price and that spread between the full bill and what
they paid the American company was how they made money well in the process of
being deep in both the strategic operations of companies in the US and in
understanding how the global marketplace for Commerce work merchant banks evolved
into more or less one flavor or another of an investment bank helping clients [merchant bank bulding turns into investment bank]
sell debt and equity and other money raising devices so that they could
continue selling ducks or rakes or tractors or lawn flamingo's yeah those [rubber duckies floating by]
are cute in the modern incarnation of merchant banks while many are actually [merchant bank throws bags of money to businessman]
able to not just advise but invest in the companies to whom they are close all
kinds of other complexities live in the border-to-border transactions and [merchant bank sends money to Mexico]
because the personal relationships of the merchant bankers themselves ended up
getting so close to the management into the government's they do [group of government officials]
with into the competitive marketplaces well each of which carried enormous
friction and merchant banks and the bankers who run them have found
themselves in the middle of all kinds of commercial transactions yeah very
lucrative business today people if you want to whine about taxes go into this
one so today merchant banking is really more
like just banking with fewer regulations and a whole lot more upside when they're
right and of course the most successful merchant banks are the ones that you
know offer merch [merchant bank wearing merch clothes]