Community Development Financial Institution-certified credit unions are key to achieving the mission of the CDFI movement, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee Tuesday. The committee conducted a hearing on how CDFIs promote housing and economic opportunities.
“[CDFI credit unions] work every day to expand economic opportunity for people and communities who have been excluded from the mainstream financial system,” the letter reads. “The 518 credit unions and cooperativas that are currently CDFI certified serve more than 19 million people through more than 3,100 branches, and CDFI credit unions lent more than $280 billion in their communities last year.
“They effectively leverage CDFI resources, lending $12 in their communities for every dollar in award funding. CDFI-certified credit unions account for 61.6% of all loan products, including residential mortgages, offered by CDFIs,” it adds.
CUNA also highlighted issues with CDFI-certified credit unions seeking to recertify, and the wait for Treasury to issue updated application requirements.
“Additionally, credit unions have expressed concerns regarding the acceptance of grants tied to CDFI certification maintenance or unreleased reporting requirements,” it reads. “The longer Treasury delays finalization of these requirements, the longer communities across the nation miss out on housing and economic opportunities.”
Further, if requirements are set outside of the risk tolerance of credit union governing boards, it is possible there may be a decrease of participation by credit unions in this space. This would represent a tremendous loss to underserved and low-income communities given CDFI-certified credit unions primacy in offering mortgage loans and a full array of consumer financial products and services,” it adds. “We urge the subcommittee, through this hearing, to underscore what is at stake as CDFIs wait for the Fund complete its updated certification process.”