The National Coalition for Community Capital (NC3) is calling on regulators and legislators to allow community champions and grassroots investors to pool capital in new ways through new types of Community Investment Funds (CIFs). This would greatly improve the ability of Americans from all walks of life to work together to 1) build personal wealth; 2) meet the capital crunch that entrepreneurs (especially those marginalized by traditional capital markets) are facing; and 3) build stronger, more resilient, inclusive, democratic, and equitable communities.

Across the nation, there is a growing desire and need for better access to capital and more ways for people to invest in local businesses. CIFs could provide a valuable tool for community members to meet this demand, yet the existing regulatory framework significantly limits the formation of such funds.

We are calling on 1) the SEC to liberalize its rules that currently restrict the formation of CIFs, 2) state regulators and legislators to develop appropriate state laws and regulations to govern CIFs, and 3) Congress to update and modernize the Investment Company Act of 1940 to allow for new types of CIFs.

These changes would enable communities to pool investments from citizen investors from across the economic spectrum into funds that are cost effective to set up; that provide local control and professional management; that offer new flexibility for making investments (e.g. debt, equity, near-equity, etc.); and that share profits with investors in ways that promote lasting wealth-building.