Proposed CDFI Fund application would exclude ‘significant swaths’ of CUs

December 5, 2022

The Treasury’s Community Development Financial Institutions (CDFI) Fund’s proposed certification application contains multiple provisions that would inappropriately exclude credit unions doing good work, CUNA wrote to the CDFI Fund Monday.

“CUNA broadly supports the Fund’s efforts to ensure that organizations that obtain a CDFI certification are truly putting mission front and center and helping the people in their Target Markets. However, the Fund’s application is not properly calibrated to achieve that end,” the letter reads. “Many of the changes in the Proposed Certification Application would exclude significant swaths of credit unions from qualifying as CDFIs for reasons that are incidental or inexplicable.

“Many of these changes are not supported by policy justifications in the application and are in opposition to statutory or regulatory provisions applicable to credit unions,” it adds.

CUNA urges the CFDI Fund not to adopt these changes, and recommends:

  • Establishing a reasonable pathway for CDFIs to retain certification following a merger.
  • Amending the responsible financing practices requires to avoid excluding credit unions offering PALs and responsible balloon payment or nonconforming mortgage loans.
  • Excluding regulated depositories from the Fund’s financial interest policy so accountable credit union board members are not prohibited from obtaining loans at the credit union.
  • Reducing the reliance on communication via service requests in the Awards Management Information System.
  • Memorializing more formal due process including reasonable notice, an appeals process, and an ombuds office.
  • Aligning reporting deadlines and streamlining/combining forms where appropriate.