Federal Reserve Bank of NY launches Investment Connection program in Puerto Rico

Community Foundation of Puerto Rico President Nelson Colón Tarrats speaks to attendees. (Courtesy)

In partnership with Puerto Rico Community Foundation and Inclusiv

SAN JUAN – Nonprofit organizations and cooperatives attended Thursday the launch of the Investment Connection Program in Puerto Rico, an initiative that seeks to connect stateside and island banks with community development projects on the island.

The initiative of the Federal Reserve Bank of New York, entails an alliance with the Puerto Rico Community Foundation (PRCF) and Inclusiv, a nonprofit that assists credit unions serving low-income communities,

The program provides community organizations with a model that “boosts an investment, donation or loan opportunity to promote and strengthen their community development proposals that are eligible under the Community Reinvestment Act (CRA),” the PRCF, which is the only local partner of the New York Fed in Puerto Rico, explained in its announcing release.

The launch event was aimed at educating organizations about the reinvestment law and its potential impact, including those related to a disaster recovery process. In addition, examples of collaborations between banks and nonprofits were shared.

The program is part of the Community Development Finance Model (CoDeFi) launched this year by the New York Fed to “support the transformation of communities, after the passage of hurricanes Irma and María, while increasing the impact of investments from local banks and the United States,” the release reads.

To request participation in the Investment Connection program, visit nyfed.org/codefi.

Puerto Rico officials meet with financial institutions in NY

SAN JUAN – After having met with Federal Reserve Bank of New York officials on Monday, the Puerto Rico governor’s chief of staff, Raúl Maldonado, and the island’s chief investment officer, Gerardo Portela, held meetings with financial institutions and investment banks in New York on Tuesday as well.

“We discussed several important issues for Puerto Rico and for Governor Ricardo Rosselló. Among them, the Opportunity Zones approved under the Tax Cuts and Jobs Act of 2017, the potential to channel investment through banks using the mechanism designed under the Community Reinvestment Act (CRA), as well as existing collaboration agreements between the Reserve Bank and the Office of the Commissioner of Financial Institutions,” said Maldonado, who was the island’s Treasury secretary.

Regarding the CRA, Reserve Bank officials mentioned the Interagency Statement on CRA Consideration for Community Development Activities in Puerto Rico issued earlier this year after Hurricane Maria struck the island.

“The CRA declaration allows any financial institution located in any state of the United States to invest in the development of the most affected communities in Puerto Rico, and that said investment is eligible for purposes of compliance with the provisions of the CRA,” said Portela, who was director of the island’s Fiscal Agency and Financial Advisory Authority.

Maldonado said that the Reserve Bank emphasized that the flexibility granted through the CRA declaration is still valid and represents a useful tool that allows banks and financial institutions to channel resources.

Federal Reserve Bank officials will travel to Puerto Rico next week to hold seminars for small and midsize businesses in collaboration with the Puerto Rico Science, Technology and Research Trust.