History of CDFI

In 2003, the New Haven Savings Bank announced plans to convert from a mutual savings bank into a stock savings bank and to grow beyond the New Haven region by acquiring several smaller banks in Connecticut and Massachusetts.  New Haven Mayor John DeStefano opposed these transactions, concerned they would lead to disinvestment in the New Haven area and especially its disadvantaged areas that were already underserved by banking services. 

The Mayor, together with dedicated community groups, represented by the Law School’s Community and Economic Development Clinic, part of the Ludwig Community Development Program and Clinic, negotiated an agreement with New Haven Savings Bank to protect investment in New Haven’s most vulnerable areas.  In exchange for the Mayor’s support of the merger and demutualization, NewAlliance Bank agreed to donate $25 million over several years for the creation of a new community development foundation.  This new foundation, called the First City Fund Corporation, was founded in May 2004 and is managed by a group of directors who represent New Haven’s diverse communities and constituency groups. 

In negotiating the agreement that established the foundation, it was the intent that the foundation would use a large portion of the $25 million to create a community development bank that would focus on community and economic development in the New Haven area’s underserved communities.