THE IMPACT OF CDFIs FROM AN INVESTOR’S PERSPECTIVE

June 17, 2026

Throughout 2025, the Community Development Financial Institution (CDFI) industry faced one of the most challenging periods in its history, confronting a series of significant threats that had the potential to reshape community revitalization and wealth-building efforts across the country. Despite these unprecedented challenges, CDFIs remained steadfast in their mission. The industry’s resilience was reflected in the strong support of the partners who make this work possible, including government and civic leaders, nonprofit and philanthropic organizations, and traditional financial institutions such as banks and credit unions.

CCLF would like to take this opportunity to: first, express our sincere appreciation to the investors who remained committed during a period of heightened uncertainty; second, reflect on the key lessons and insights gained throughout 2025; and third, explore opportunities to further strengthen investment in historically underserved communities.

As a framework for this reflection, CCLF presents a conversation between DeMario Greene, CCLF’s Policy and Government Relations Director, and Thurman “Tony” Smith, Senior Vice President of Community Development–Midwest at PNC Bank. Smith has been one of CCLF’s most committed investors for more than 16 years, and his insights offer valuable perspective on the past year, as well as the opportunities that lie ahead.

DeMario: Given all the changes that have happened over the past year regarding federal support for community revitalization efforts, including changes at the CDFI Fund and a shift in focus from the regulators of the Community Reinvestment Act, how did PNC adjust its community development investment strategy to meet the moment?

Tony: Over the years, CDFIs have weathered a host of economic, geo-political and competitive challenges. This resilience has proven their ability to adapt, serve and grow amidst uncertainty. And the need for CDFI’s has increased. We have therefore chosen, with thoughtful consideration of potential funding cutbacks or portfolio erosion, to continue to increase our investments in CDFI’s, adding more than $400MM in the last four years. We also made direct investments in MDI (Minority Depository Institution)-CDFI banks. We made deposits in deposit-taking CDFI’s (banks and credit unions). We helped fund three emerging CDFI’s, and we expect to continue this journey in the years ahead.

DeMario: As community focused organizations are seeking to diversify their resources, CCLF, as a leader of the Illinois CDFI Network, has taken this moment as an opportunity to increase our advocacy for the creation of a state-based CDFI Fund to help ensure that community development dollars continue to flow to the areas of greatest need? Are there any state and local initiatives that PNC has undertaken to help meet that need?

Tony: While there are many noble community development priorities, we have focused on affordable and workforce housing, affordable community healthcare, early childhood education and small businesses. Each of these, treated as an economic segment, offers varying levels of earnings opportunity and portfolio resilience (countering cyclicality). Each has enjoyed some level of support across political aisles and opportunities to lever funds via matching with known programs or via participation with other funders. Diversifying into more reliable earned income sources rather than contribution sources has to be a priority. This may mean CDFIs have to begin charging some fees for services historically rendered at no cost. It may mean cutting back on some services for which there is no offsetting revenue. It may take the form of using AI or other more cost-efficient approaches to execute parts of the mission. Efficiency will be a trademark attribute of CDFIs that win in our future economy.

PNC has announced it wants to be the bank for housing: affordable, workforce and market. Serving all populations, including seniors, those living with disabilities, veterans, women and children. Because of this, all PNC verticals focused on real estate have been aligned around this and why you see that in late 2025, PNC closed its first EQ3, which is an innovative new product designed to provide both debt and direct, non-tax credit equity to market rate housing serving affordable and workforce communities. PNC has also continued to focus on small businesses and has funded five community small business pilots across the country. In Chicago, this partnership with a CDFI and Sunshine Enterprises is funding the friend and family type capital which is otherwise inaccessible by small businesses in our most underserved geographies.

DeMario: In October 2025, several of the banking trade associations as well as the National Association of Affordable Housing Lenders sent a joint letter to the White House Office of Management and Budget Director Russell Vought and U.S. Treasury Department Secretary Scott Bessent to affirm their support for CDFIs and express their desire to work alongside this administration to strengthen the critical work of the CDFI Fund. PNC is a member of several of these associations. Can you speak to why PNC, and the banking industry at large, thought it was so important to stand up for CDFIs in this moment?

Tony: PNC has been a long-standing supporter of the National Association of Affordable Housing Lenders (NAAHL), the Opportunity Finance Network (OFN), the National Community Reinvestment Coalition (NCRC), and the CDFI Coalition, as well as the Hispanic Chamber of Commerce, NAACP and other LMI centered organizations. And we continue to believe that CDFI’s play a central role in extending capital access to underserved communities that sit outside of the reach of traditional financial organizations. CDFIs create both trust and economic comprehension for those peoples and geographies that have learned not to trust. And the results speak for themselves. CDFI’s work! And that work is so much more than remarkable!

DeMario: In October 2025, PNC convened a very well-received Community Leadership Symposium focused on America’s affordability crisis, as we peer into 2026 and the near future, what can we expect from PNC as it continues to help Americans work through the “poverty, lack of capital access, and the economic pressures” that are currently squeezing low-income neighborhoods?

Tony: If we have learned anything over that last decade, it is that communities don’t want us to tell them what they need but rather have asked us to listen. And by listening to these remarkable voices, we funded authentic research so we can better understand root causes, and then innovated new strategies to solve community-based problems. This is why we launched our Community Micro-Equity Program to get friend and family type equity (not debt) capital to small LMI businesses. It is why we launched our “Opportunity Zone Program” only in LMI communities. It is why we launched a small developer loan program and more recently our EQ3, which is a direct investment in housing developments that primarily benefit LMI peoples and communities.

Our Opportunity Zone program funded projects like The Habitat Company’s Ogden Commons which now houses the community health operations for Sinai as well as three retail businesses on the ground floor. The project compliments the affordable housing efforts in the LMI community proximate to the Illinois Medical Center. Other PNC OpZone Investments all carry a condition that the project primarily serve LMI peoples and communities. This we believe echoes the spirit of the legislation.

CCLF extends its sincere appreciation to Tony Smith and PNC Bank for their participation in this discussion and for their longstanding partnership. Since 2010, PNC has invested more than $19 million in CCLF and collaborated on several transformative projects, including Amped Kitchens in the Belmont-Cragin neighborhood and the XS Tennis Center in Washington Park.

In addition, PNC has made significant contributions to CCLF’s Communities of Color Fund, a multimillion-dollar loan fund designed to address historic disinvestment in low- to moderate-income neighborhoods across Chicagoland, with a strong emphasis on Chicago’s South and West sides as well as suburban communities with limited access to affordable capital.

Brief Bio

With more than 30 years in banking and community development, Tony leads PNC’s community lending and investing practice for the Midwestern USA. He has served on several CDFI boards, co-chaired the City of Chicago Inclusionary Housing Task Force, served as Treasurer of the Cook County Land Bank, and was appointed by Gov. J. B Pritzker to the state’s Housing Committee for the Missing Middle. He also serves on the board of the National Institute of Economic Development. He graduated summa cum laude from Chicago State University and holds an MBA from the University of Southern California. Tony has authored a number of works on microfinance, gentrification, real estate and non-profit topics. He has been recognized with a number of awards, including his Community Microfinance program, which shared the Chicago Innovation Award. And as a Marine, he was awarded the Presidential Service Medal for his role as a White House Liaison Officer for the Presidential helicopter unit (HMX-1).