Testimony — Jonathan Welty, Ohio Capital Finance Corporation, on House Bill 96 (March 5, 2025)

Summary

Interested party testimony on House Bill 96 before the House Development Committee, dated Wednesday, March 5, 2025, in the name of Jonathan Welty, President of Ohio Capital Finance Corporation, testifying on behalf of the Ohio CDFI Network. The testimony asks the Legislature to include a new proposed $50 million CDFI Fund Program in the state's Main Operating Budget. It states that the Network has leveraged more than $4.3 billion in additional investments since the first CDFI was established in Ohio. It cites a $75 million Michigan CDFI Fund created in 2022 and says the Ohio Department of Development has run the CDFI Loan Participation Program since 2022.

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Full text

                                    House Development Committee
                       Interested Party Testimony, House Bill 96 (Stewart)
Jonathan Welty, President (if called prior to 11:30 a.m.) or Diane Alecusan, Director of Grants and CDFI
                        Compliance (if called after 11:30 a.m.), on his behalf
                                    Ohio Capital Finance Corporation
                                      Wednesday, March 5, 2025
Chair Hoops, Vice Chair Lorenz, Ranking Member Abdullahi and members of the House
Development Committee, thank you for the opportunity to present Interested Party Testimony on
House Bill 96, the main operating budget for fiscal years 2026 and 2027.
My name is Jonathan Welty and I am the President of Ohio Capital Finance Corporation. I am
testifying on behalf of the Ohio CDFI Network, of which Ohio Capital Finance Corporation is a
member. We are here today to respectfully request the Legislature include a new proposed $50
million CDFI Fund Program in House Bill 96, the state’s Main Operating Budget.

Community Development Financial Institutions, or “CDFIs” are mission-driven lenders. Members
of the Ohio CDFI Network are loan funds, along with hundreds of other loan funds across the
country. We are certified and regulated by the U.S. Department of Treasury.

There are 13 members of the CDFI Network with 15 offices across the state of Ohio. Members
of the CDFI Network provide access to credit and specialized loan products to business owners,
real estate developers, and nonprofits that usually do not qualify for a typical bank loan.

I and my colleagues have provided capital and expertise in every county in the state. And we
have leveraged more than $4.3 billion dollars in additional investments since the first CDFI was
established in Ohio nearly 30 years ago.

We are on the front lines of capital needs within the state. We do our best to provide financing or
refer potential borrowers to another CDFI or bank when one of us individually cannot support
them. But we, as a Network, often struggle to meet demand because we do not have the
available capital on hand to lend or have the resources we need to provide the intensive support
and education some borrowers need.

Michigan’s Legislature saw similar trends of development projects not moving forward and small
businesses struggling to get off the ground. In 2022, Michigan created a $75 million Michigan
CDFI Fund for the loan funds operating in Michigan. In 2023, Michigan allocated another $19
million to fuel investment in rural and low-income areas, and last year, Michigan allocated an
additional $5 million to its CDFI Fund.

The Ohio Department of Development already works with several of my peers CDFIs. Since
2022, ODOD has run the CDFI Loan Participation Program. This program, per federal
guidelines, is specifically for small business borrowers.

The CDFI Network is now respectfully asking the Ohio General Assembly to follow other states,
like Michigan and New York, and invest in all CDFI loan activity: small business lending and real
estate lending.
A $50 million grant to the members of Ohio’s CDFI Network will get lent out over and over,
having much greater and longer-lasting impact than a one-time grant to a small business owner
or housing developer.

Chair Hoops and members of the House Development Committee, thank you for the opportunity
to provide interested party testimony on a tool that will have ongoing impact throughout Ohio for
years to come.


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