WASHINGTON — Credit unions that have been recognized by the U.S. Treasury Department as community development financial institutions celebrated a significant victory at the end of the 2008 appropriations cycle. For the first time in almost eight years, Treasury's CDFI Fund saw an increase in congressional appropriations.

The large omnibus spending bill that Congress passed in December included $94 million for the fund. This is the first time since 2001 that Congress has increased the fund's appropriations, according to the CDFI Coalition, an organization of community development financial institutions.

Although Congress has never cut the appropriations as much as the Bush Administration requested and declined to take up an earlier administration proposal to end the program, supporters of the program have long felt besieged and believed they had to fight for the program's very survival. For example, encouraging Congress to decline a previous attempt to roll funding for its programs into some administered by the U.S. Department of Commerce.

Reaction from various credit union leaders has been favorable and enthusiastic.

The National Federation of Community Development Credit Unions cheered the increase in funding noting that this is the first time in recent years that the Fund has not had to fight for minimal allocations.

“We are gratified and excited about this increase, which responds to the advocacy of the CDFI Coalition,” said Federation President/CEO Cliff Rosenthal. The Federation sits on the board of the coalition, which it helped to organize more than a decade ago. “We've fought a defensive battle for years, and this increase will bring us much closer to the level of funding of some years ago.”

The Federation also noted that the increased funding coincides with an increase in applications to the fund from CDFIs, including credit unions. Rosenthal observed that it appeared that 36 CUs this year had applied for help, up from the 22 which had applied for the last round.

The Federation reported that 11 credit unions had applied for “Small and Emerging CDFI Assistance, 15 for the larger, Category II or “Core” assistance, and 10 credit unions had applied for technical assistance only

Overall from all CDFI applicants, both CU and non-CU, Treasury has reported that the program received 225 applications for the Fiscal Year 2008 round of grants, up over 122% over last year's requested funds. The applicants requested an aggregate of over $205.5 million in assistance, which also increased from last year by roughly 150%, the department said.

NAFCU Senior Vice President of Government Affairs Dan Berger expressed satisfaction with the funding increase although he acknowledged that even more money would have been helpful. “We are glad that the appropriation for CDFI of $94 million is an increase from the Senate's $90 million, though naturally we would have preferred the $100 million the House approved,” he said.

CUNA President/CEO Dan Mica agreed. “CUNA has strongly supported the CDFI Fund, particularly in opposing cuts to its level in order to continue providing credit, investment capital, and financial services in distressed communities,” he said. “This development will help ensure that community development credit unions and other financial intermediaries will be able to continue supplying low-income, distressed communities with traditional banking services such as savings accounts and personal loans, and offering individuals the tools needed to become self-sufficient stakeholders in their own future.”

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