The NCUA released a supervisory letter Tuesday establishing a framework for examination and supervision of certified Community Development Financial Institutions (CDFIs). The letter (SL-16-01) contains guidance that applies to all CDFI-certified credit unions.
CDFIs can be certified by the U.S. Treasury if they meet certain requirements, including serving low-income areas, and they are eligible for grants and other awards from the Treasury’s CDFI Fund. There are 288 CDFI-certified credit unions out of the 1,046 total CDFIs certified as of Aug. 31.
CDFIs can have a different risk profile than other credit unions, and the agency’s focus is not to avoid the risks, but to ensure the credit unions adequately manage the risks. Field staff will focus on evaluating:
CDFI credit unions have the ability to expand or offer more services to better serve memberships of modest means by generating economic growth and opportunity in distressed communities.
The NCUA entered into an agreement with the CDFI Fund in January, with the goal of doubling the number of CDFI-certified credit unions during 2016.