'Challenging Environment' Exists for CDFIs
Due to untold delays, the CDFI application blackout continues for “an undetermined” amount of time.
The Community Development Financial Institutions (CDFI) Fund waiting game continues and credit union officials worry delays in the application process are hurting already-suffering communities around the country.
The CDFI Fund announced a blackout period for applications in October 2022 while the U.S. Treasury figured out updated application and recertification processes. The new CDFI Certification Application process was scheduled to roll out April 3, but untold delays have pushed the blackout period to “an undetermined” amount of time.
As credit unions watch the calendar move closer to November, CUNA officials made a plea to the Senate Banking Committee on Tuesday to somehow help remove the logjam and push Treasury to un-pause the application process.
In a letter to the Senate Committee, CUNA President/CEO Jim Nussle wrote, “The longer Treasury delays finalization of these requirements, the longer communities across the nation miss out on housing and economic opportunities.”
He added that this waiting game has created “a challenging environment for CDFI-certified credit unions to be able to promote housing and economic opportunity. Currently, CDFI-certified credit unions seeking recertification from the Department of Treasury, and those seeking certification, are waiting for the Fund to release its updated application requirements. Additionally, credit unions have expressed concerns regarding the acceptance of grants tied to CDFI certification maintenance or unreleased reporting requirements.”
CUNA stated it’s possible with the new requirements, if they “are set outside of the risk tolerance of credit union governing boards,” could result in a decrease of credit unions participating in the CDFI Fund and be a “tremendous loss to underserved and low-income communities.”
Nussle wrote, “We urge the subcommittee, through this hearing, to underscore what is at stake as CDFIs wait for the Fund to complete its updated certification process.”
As of May, credit unions accounted for 531 of the nation’s 1,432 CDFIs.