We have worked closely with HUD to improve oversight, accountability and transparency at the PEDP, said Mayor Angel Taveras, chairman of the agency. I thank HUD for its commitment to Providence and for its recognition of our efforts to bring the PEDPs activities into compliance. The PEDP is once again in a strong position to support our work to create jobs and spur economic development in Rhode Islands Capital City.
The PEDPs Revolving Loan Fund program provides low-interest loans to small businesses for the purpose of creating local jobs, eliminating blight and other national objectives. The PEDP is financed by HUD through Community Development Block Grant (CDBG) funding.
In recognition of the significant progress and the Citys commitment to promote transparency and accountability of the Citys economic development activities, we have authorized PEDP to invite businesses to apply for Community Development Block Grant funding, and make recommendations to HUD for funding approval, HUD Regional Director Robert D. Shumeyko wrote in a December 5 letter authorizing Revolving Loan Fund lending to begin again.
HUDs approval to resume lending comes at the conclusion of a year-and-a-half review by the federal agency of the PEDPs underwriting, performance, management and oversight practices. Last spring, HUD began a comprehensive review of PEDPs activities from 2005 through June 2011, six months after Mayor Taveras took office.
The PEDP continued to provide loans under a separate, $10 million HUD Section 108 loan program throughout the course of HUDs review.
HUD commended the City for the steps it has taken to bring the PEDP into compliance, including:
" Significant management and organizational changes
" Development of strong oversight policies and procedures, including new underwriting criteria, reporting requirements, internal loan-review guidelines, collection procedures, conflict of interest policies and disclosure requirements
" Establishment and implementation of an improved file management and record-keeping system
HUD officials will continue to review loans for eligibility, compliance with underwriting standards and other requirements. Applicants are required to show their ability to achieve a sustainable level of operation and maintain sufficient cash flow to repay the loan.
I cannot thank the director and management of the HUD Regional Office enough for their professionalism and support to our City throughout this review process, said Providence Economic Development Director James S. Bennett. The partnerships between Providence and HUD were strengthened and improved, and we are on a strong and steady path forward to grow our local economy.