CUNA President: Credit Unions Need Clarity on CDFI Process
CUNA's President/CEO Jim Nussle has written to the CDFI Fund saying credit unions need clarity on the certification and application process. Learn why.
Letter from advocacy group leader Jim Nussle calls for more engagement with NCUA to better understand impact on credit unions.
“The Fund also has not indicated when the finalized application will be implemented,” CUNA President/CEO Jim Nussle wrote, in a letter to the House Ways and Means Committee. “CUNA urges the CDFI Fund to more thoroughly engage with NCUA to better understand credit unions and the requirements of insured depositories to establish standards that will not conflict with prudential and regulatory expectations.”
NAFCU has made similar recommendations as well.
Treasury Secretary Janet Yellen, whose department includes the fund, testified before the committee Friday morning, but she was not asked about the CDFI program.
Inside the Letter
Call for Increased Funding
The hearing came one day after the Biden Administration submitted its FY24 budget request, which calls for $341 million for the CDFI program. In his letter, Nussle renewed his own request for the program to receive $500 million in the next fiscal year.
“The rate of growth of CDFIs over the past several years fully illustrates the great need for substantial funding for the Fund,” he wrote.
Updates to the Application
The Treasury Department and fund officials continue to review comments submitted as part of the review of the application and certification process.
Nussle recommended that fund officials pursue a limited number of changes implemented gradually, such as pilot programs, rather than a total overhaul of the process.
He added that the fund should reduce the burden of obtaining and maintaining certification, particularly for small credit unions and MDI credit unions.
Nussle noted that CDFI Director Jodie Harris is leaving the Treasury Department and said the next director should have some experience with insured depository institutions.
“This will allow the new director to reduce unnecessary sources of friction in the certification process and take full advantage of efficiencies through partnership with the federal financial regulators,” he wrote.
A New Office
In addition, Nussle recommended that the fund establish an ombudsman office to clarify and mediate confusion for CDFIs.
The letter notes that proposed changes to the process have created significant uncertainty for credit unions that have been awarded, but not yet closed on, grants or other awards.
“Credit unions have reported that they are certain they cannot recertify under the current application as proposed, and therefore are not certain whether they can accept an award in good faith,” he wrote, adding that the fund should make it clear that an award will not be clawed back if a credit union cannot recertify in the future unless it knew, or should have known, that it could not certify under the current standards.