CUNA sent a letter to CDFI Fund Director Jodie Harris regarding reports concerning credit unions being awarded a CDFI designation only to be revoked until they cure perceived deficiencies.
“Multiple credit unions have indicated they have been told their CDFI designation may be revoked due to the demographics of their democratically elected board,” the letter reads.” Credit unions report an absence of meaningful guidance from the CDFI Fund about the specifics of how the demographics of their particular board is insufficient and how they might be able to cure the deficiencies, leaving them unable to determine whether the actions available to them under the credit union’s bylaws and chartering laws would even permit them to take action to cure the issues within the limited cure periods permitted by the CDFI Fund.”
These credit unions report that the facts or circumstances deemed deficiencies are often present throughout the application process, cannot be changed retroactively, and the CDFI Fund offers little or no guidance on how they can be cured within very limited time frames permitted by the Fund. Credit unions further report a significant backlog in processing applications, with multiple credit unions having to wait a year for a determination of their application, delaying their opportunity to apply for grants or to issue secondary capital.
Credit unions account for 25.4% of CDFIs and 56.8% of the total amount of issued financial products to CDFI target markets. Credit unions are critical participants in the program, providing financial services to low-income and targeted markets in support of the program’s mission.
CUNA strongly supports the mission of the CDFI Fund and looks forward to working with the Fund to resolve these issues so that qualified credit unions can continue to deploy CDFI funds to the communities that need them most.