In January, Labour MP Gareth Thomas introduced a proposal for The Banks Bill (Financial Exclusion and Access to Finance). Often referred to as a “British Community Reinvestment Act”, it felt like a milestone moment. The bill, inspired by the landmark US legislation of the same name, calls on banks to lend more to the places and people often overlooked by mainstream finance, supporting small businesses, community lenders, and local economies to thrive. It’s not law yet, but its approval in the House of Commons marks an important step towards tackling financial exclusion and ensuring money serves communities, not just markets.
That news struck a special chord for me. It closely echoes many of the recommendations I made after visiting the United States last October for the Opportunity Finance Network’s 41st annual conference (OFN41) in Washington D.C. – a gathering that brings together community lenders, policymakers and funders from across the world. With backing from Power to Change, Responsible Finance and the Liverpool City Region Combined Authority, the trip was an eye-opening chance to see what a mature, well-supported community finance ecosystem can look like. It felt like the next opportunity for the UK is rebuilding finance around people and place.
The roots of the CDFI movement
The US Community Development Finance Institution (CDFI) movement began during the Civil Rights era, when activists and community leaders responded to redlining and financial exclusion by building their own solutions. Early pioneers like South Shore Bank in Chicago proved that investing in marginalised communities wasn’t charity – it was sustainable development. Federal recognition came in the 1990s with the launch of the CDFI Fund, blending government subsidy with private and philanthropic capital.
Today, more than 1,400 US CDFIs manage over $250 billion in assets. The UK’s story is smaller but born of the same spirit – rooted in mutual aid, community businesses, cooperatives and social enterprise. What the US achieved nationally, the UK could now advance locally through devolution and stronger community finance infrastructure.
Insights from the US: what can we learn?
At OFN41, one message came through powerfully: inclusive finance works when it’s designed for people, not just profit. The US model shows that patient, blended money – where public funds, philanthropy, and private investment work together – is key to scale and sustainability.
Subsidy isn’t dependency; it’s structural fairness. When core costs and community relationships are properly funded, investment capital reaches deeper into places that traditional finance shuns.
Other lessons stood out, too:
- Partnerships build strength: Cooperation, not competition, drives impact. Many US coalitions share back-office systems or co-design products to reach underserved communities.
- Digital infrastructure matters: Smart data tools improve accountability and free people up for what matters most – relationships.
- Diversity strengthens leadership: The Women’s CDFI Leadership Network has shown how mentorship and inclusion transform the sector.
- Storytelling builds confidence: Clear, simple, authentic stories make community finance tangible to investors and residents alike.
Reflections
One idea I’ve brought home is that everyone in community finance is, in some way, a portfolio manager. From lending teams to leadership, we all share responsibility for balancing trust and due diligence – understanding what ‘good risk’ looks like when investing in people, not just numbers.
The US example shows what’s possible when finance is local, values-driven, and properly resourced. Gareth Thomas’s proposed UK Community Reinvestment Act suggests that policymakers are starting to listen. The challenge – and opportunity – now is to turn that optimism into action: to build a system where fair, inclusive finance is not a niche experiment, but a national norm.
Jennifer Van der Merwe is executive director at Kindred and sits on the Liverpool City Region Business and Enterprise Board, where she champions inclusive growth. Kindred invests in socially-trading organisations across the Liverpool City Region, providing money, support and collaboration to help grow their impact and strengthen the social economy. It also advocates for the devolution of money and decentralised decision-making to help build a kinder, fairer economy in the region.
