House Members Question Management of CDFI Program
A bipartisan group of House members echoed many concerns raised by credit union groups in a letter questioning management of the CDFI program. Learn why.
Concerns cited regarding CDFI Certification process and application backlog echo those of credit union groups.
In a letter to CDFI Fund Director Jodie Harris, the lawmakers said they are receiving complaints about the operation of the CDFI program.
“These include institutions waiting for certification decisions on their application for over 12 months, reports of CDFIs being decertified and losing access to awards without warning or a chance to “cure” the issues, and proposed changes to the certification process that could deny some institutions that serve underserved communities access to the CDFI Fund and awards,” they wrote.
Credit union trade groups recently have complained about the CDFI program, and the House members echoed many of their concerns.
At the same time, the Treasury Department’s Inspector General last week issued a report on “management and performance challenges.” In that report, the IG listed hurdles that the CDFI Fund has faced in making pandemic-related awards, but did not cite the overall certification process as an issue.
Inside the Letter
In their letter to Harris, the House members wrote that they are concerned about the lack of communication from the CDFI Fund on problems with the operation of the program.
“We urge you to consider ways to address these concerns, such as greater coordination with federal financial institution regulators, granting community financial institutions that would be decertified and lose awards a cure period and also shifting resources to clearing out the backlog of applications,” they wrote.
They asked Harris for information about the backlog and how fund officials are dealing with the problem. They also want information about the decertification process and whether the agency provides a way for financial institutions to become re-certified.
Further, they questioned why the agency is overhauling the certification process itself, how any updates will impact currently certified financial institutions and whether the changes are being coordinated with other financial regulators that supervise those institutions.
Treasury Department Internal Report
But while members of Congress and financial trade groups are griping about CDFI operations, the Treasury Department’s IG focused instead on the CDFI Fund’s issues with distributing pandemic-related funds.
The report said that the Treasury Department has faced issues in monitoring the use of the $8.26 billion distributed to CDFIs and Minority Depository Institutions as part of the Emergency Capital Investment Program.
The IG also cited delays in awarding funds under the Equitable Recovery Program as a challenge facing the department.