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NAFCU, CUNA offer ways to strengthen CDFI application, certification
NAFCU and CUNA Friday detailed ways to improve the Community Development Financial Institution (CDFI) Fund’s Certification Application and Certification Agreement as the fund continues to work through revisions to the application and process. The CDFI Fund is expected to release the updated application and begin accepting new applications this fall.
The associations sent a letter to CDFI Fund Acting Director Marcia Sigal that included redlined revisions to the application and agreement. The revisions are intended to support credit unions’ participation in the program and hold CDFI-certified institutions to strong standards for responsible lending – especially in underserved communities.
NAFCU and CUNA detailed how “CDFI-certified credit unions and cooperativas are key to achieving the mission of the CDFI movement,” noting their efforts “to expand economic opportunity for people and communities who have been excluded from the mainstream financial system.”
“The 531 credit unions and cooperativas that are currently CDFI certified serve more than 20.5 million people through more than 2,800 branches, and CDFI credit unions lent more than $192 billion in their communities last year,” they wrote. “They effectively leverage CDFI resources, lending $12 in their communities for every dollar in award funding. And their cooperative structure means that credit unions and cooperativas do well only when their members do well.”
The associations referenced lawmakers’ request for specific, technical recommendations to the application and agreement, and explained that their recommendations were made with input from CDFI credit unions. They also highlighted the importance of the Rapid Response Program and Equitable Recovery Program in “allow[ing] CDFI credit unions to deepen their impact and create innovative new programs to support their members in building assets through saving, small business ownership, homeownership, and more.”
NAFCU has consistently raised credit unions’ concerns related to the CDFI Fund’s delay to its certification application, including concerns that revisions could make it more difficult for small and minority depository institution (MDI) credit unions to become certified and the potential loss of certification status without the opportunity to requalify. The association has also called on lawmakers to support legislation to increase CDFI transparency and fully fund the CDFI Fund through the appropriations process.