CUNA wrote to the House Appropriations Subcommittee on Financial Services and General Government (FSGG) on Tuesday to express concern that the administration’s budget request does not include adequate funding for the Community Development Financial Institutions (CDFI) Fund or the Community Development Revolving Loan Fund (CDRLF).
The Treasury’s CDFI Fund and NCUA’s CDRLF are two important funds that help credit unions advance underserved communities. The CDFI Fund makes capital grants, equity investments and awards for technical assistance to CDFIs for community development initiatives such as small businesses, community facilities, and low-income housing.
CDFIs such as Community Development Credit Unions (CDCUs) are charged with supplying low-income, distressed communities with traditional banking services such as savings accounts and personal loans, and offering individuals the tools needed to become self-sufficient stakeholders in their own future.
“The CDFI Fund is used to grow local economies,” CUNA’s letter reads. “Fully funding the CDFI Fund is an important investment for the federal government.”
The CDRLF assists credit unions serving low-income communities to:
“The CDRLF usually receives requests that greatly exceed available funds and CUNA is concerned that an elimination of this fund will result in fewer low-income credit unions having access to needed capital to provide critical services to low income credit union members.”
CUNA’s letter also notes that every dollar appropriated to the CDRLF is passed on directly to the underserved communities, as credit unions insured by NCUA fund the CDRLF’s administrative costs.
On Wednesday, the subcommittee approved increases in funding for both programs. The full House Committee on Appropriations is expected to consider the legislation in the coming weeks.