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NAFCU addresses legality of CUs participating in Greenhouse Gas Reduction Fund
In response to inaccurate and misleading comments regarding the Environmental Protection Agency’s (EPA) ability to distribute money from the Greenhouse Gas Reduction (GHGR) Fund to credit unions, NAFCU Vice President of Regulatory Affairs Ann Petros countered with a legal analysis that indicates otherwise.
NAFCU last month provided comments to the EPA on the GHGR Fund as it works to disburse $27 billion provided under the Inflation Reduction Act of 2022 to provide grants for zero-emission technologies, and financial and technical assistance for projects to reduce greenhouse gas emissions and other air pollution.
The letter sent Tuesday was accompanied by a detailed legal memorandum regarding the fund’s statute that flags the Coalition for Green Capital has made erroneous claims – at least 50 times in filings to the EPA and the Environmental Financial Advisory Board – that there is a directive for the EPA to establish and capitalize a single, national green bank to disburse GHGR Fund monies.
Legal interpretation of the section indicates that the EPA has “considerable discretion and latitude to adopt and implement a broader and more accommodating framework that will allow various other eligible recipients and qualified organizations to apply for and secure grants,” Petros wrote. She added that it “makes no reference to a national green bank but instead directs the EPA to make grants to ‘eligible recipients’ on a ‘competitive basis.’”
In NAFCU’s December 5 comments, Petros highlighted that credit unions’ “wealth of experience as community-based, cooperative lenders” will support the long-term success of the GHGR Fund, especially for projects in low-income and disadvantaged communities. She also noted some NAFCU-member credit unions “have already established an eligible non-profit organization, Ecority, through a consortium of credit unions and [Community Development Financial Institution (CDFI)] credit unions that are ready and willing to assist the EPA in dispersing funds to communities that have historically lacked access to credit.”
Petros argued that establishing a single national green bank “would lack familiarity with local markets, potentially expose the GHGR Fund to more concentrated risk, and lack the inclusivity necessary to make this program a success.”
“Instead, the EPA should adopt a community lender, communities first approach and engage community lenders like credit unions as indirect recipients of the available funding in the GHGR Fund. Credit unions and CDFI credit unions are the key to the effective management of and distribution of funding from the GHGR Fund,” Petros said in the December letter.
NAFCU will continue to advocate for credit unions’ inclusion in the GHGR Fund process by working with the EPA and Congress to ensure appropriate implementation of the fund.