Department of Treasury, Washington, D.C. Credit/Adobe Stock
After months of technical and process-driven delays, the U.S. Treasury Department released its revised CDFI certification application Thursday. The hundreds of credit unions that have been on hold as the CDFI Fund initiated a certification blackout period since Oct. 1, 2022, can now apply for CDFI certification and recertification with the new process in place.
According to officials at NAFCU, the CDFI Fund received and reviewed more than 250 comment letters in response to the revisions proposed to the CDFI Certification Application and 40 comment letters for the Annual Certification and Data Collection Report and Transaction Level Report.
During the past year, CUNA, NAFCU and credit union leaders pushed for a number of changes to the CDFI application process. According to CUNA and NAFCU, the final application reflects credit union requested changes, including:
- Providing 30 days for credit unions to execute and return the CDFI Certification Agreement, rather than 10.
- Allowing for lenders that offer balloon payment mortgages if it is responsibly designed. Broadening the definition of "development services" to better recognize the effectiveness of coaching, online training, youth programs, and other services offered by credit unions.
- Altering the Financial Interest Policy to ensure that officers of credit union governing boards who hold loans in the credit union are not excluded from serving as a source of accountability.
- Recognizing that staff and not just executives of mission-driven organizations that serve a target market are appropriate sources of accountability to CDFI credit unions.
"NAFCU appreciates the CDFI Fund finalizing its application for certification and incorporating several recommendations from CUNA and NAFCU. While credit unions can now finally access a certification application for the critical CDFI Fund to unleash financial resources to communities that face immense economic struggles, we still have significant concerns with several aspects of the application," said NAFCU President/CEO Dan Berger. "There are more than 530 credit unions and cooperatives that are CDFI certified, serving more than 20 million people. NAFCU looks forward to continuing to work with the CDFI Fund and is ready to jump in and help any member credit union to ensure underserved communities can thrive and have financial support available."
CUNA President/CEO Jim Nussle said, "We thank the fund for taking credit union concerns seriously, and are relieved that many important changes were made. Updating the certification standards was a significant challenge, and a necessary step to protect the value of the certification and the low-income and underserved populations at the heart of the mission of both the Fund and CDFI credit unions.
"CUNA and NAFCU thank the fund for taking the time to thoroughly consider stakeholder feedback. However, there is more work to be done as concerns regarding Target Market methodologies were not addressed. The CDFI Fund remains one of the most effective ways to multiply and leverage federal funds into positive outcomes to communities, and CUNA, NAFCU, and CDFI credit unions look forward to continued work with the Fund to ensure credit unions doing the work of reaching historically redlined, rural, and under-resourced communities are able to continue doing so," said Nussle.
President/CEO of CU Strategic Planning, the CDFI certification and compliance organization, Stacy Augustine said in a prepared statement, "As we analyze the new application our goal is to ensure credit unions retain their CDFI certification while facilitating the expansion of the powerful designation to even more credit unions nationwide. We firmly believe that every community in America deserves access to a CDFI."
According to the Treasury Department, applications for currently certified CDFIs to reapply must be submitted between Aug. 1 and Dec. 20, 2024. Failure to do so will result in losing CDFI Certification.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
