Republicans say overall spending is too high.
As a House appropriations subcommittee approved an FY23 financial service spending bill, credit union trade groups endorsed the large funding increase the measure includes for the Community Development Financial Institutions program.
However, Republican members of the House Financial Services Appropriations Subcommittee said they were unhappy with the overall increase in funding for programs in the bill.
The subcommittee approved the bill by voice vote, sending it to the full House Appropriations Committee. As they have in the past, subcommittee members did not attempt to offer amendments to the bill. That usually occurs during the full committee markup.
The House bill calls for $336.4 million for the CDFI program—an increase of $41.2 million over FY22. The bill also calls for $4 million for the National Credit Union Administration’s Community Development Revolving Loan fund—an increase of almost $2.5 million from the current fiscal year.
House Appropriations Committee Chairwoman Rep. Rosa DeLauro, D-Conn., said funding in the bill would “promote economic growth in some of our most distressed communities.”
But House Appropriations Committee ranking Republican Rep. Kay Granger of Texas said Republicans are unhappy with the measure. “The bill before us simply spends too much,” she said.
Trade Groups Push for Funding
Meanwhile credit union trade groups continued their push for the funding increases for the CDFI and the CDRLF programs.
Jim Nussle, president/CEO of the Credit Union National Association recommended that the CDFI program receive $330 million, with an additional $5 million going to the CDFI Fund to address the affordable housing crisis. He added that CUNA supports a $6 million funding level for the CDRLF program.
“CDFIs such as Community Development Credit Unions (CDCUs) are charged with 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,” Nussle wrote, in a letter to the appropriations subcommittee.
An official from The National Association of Federally-Insured Credit Unions said the trade group was encouraged by the spending levels called for in the bill.
“These programs have proven to be an invaluable means of providing financial services to underserved areas and demonstrated their worth during the pandemic,” Brad Thaler, NAFCU’s vice president of legislative affairs, wrote in a letter to appropriators.
However, Thaler also cited a few problems with the CDFI program.
He said that some credit unions have reported long delays of more than 12 months for the Treasury Department to respond to applications for certification.
He said that several credit unions also have lost their CDFI certification, without the chance to re-qualify.
He said that several credit unions also have lost their CDFI certification, adding that they effectively were denied the chance to reaffirm their certification.
Thaler added that NAFCU had learned that the CDFI Fund is making changes to the certification process that would make it more difficult for minority depository institutions and small financial institutions to become certified. He did not elaborate on that issue.