Credit union group questions proposed updates to CDFI Certification process, calls on Congress for greater program funding.
As representatives of its member credit unions prepare to “Hike the Hill,” Inclusiv is urging them to push members of Congress to ensure that new CDFI Certification requirements do not contain barriers that may prevent credit unions from qualifying.
“The Fund’s proposed updates to its certification standards, however, include a number of provisions that would create significant barriers to participation for regulated, insured credit unions, especially high impact but under-resourced small and MDI credit unions that are critical to meeting financial services and credit needs in historically redlined and low-income communities,” Inclusiv said, in talking points distributed to its members.
Thousands of credit union officials are expected in the nation’s capital next week as part of CUNA’s Governmental Affairs Conference. As in past years, CUNA is urging attendees to “Hike the Hill” and meet with members of Congress about credit union priorities.
What Is Inclusiv Pushing For?
Inclusiv is asking attendees to lobby on behalf of the CDFI program.
In addition to addressing the application process, the credit union group is urging Congress to increase funding for the CDFI Fund to $1 billion or, at a minimum, $500 million for FY24. The program received $331 million in FY23 and Inclusiv said that there are concerns there will be “downward pressure on the Fund’s allocation for FY24, so it is important to advocate for robust funding for and highlight the importance of the Fund.”
Inclusiv said the cumulative impact of the adjustments to the certification and reporting materials will result in a commitment of at least 160 hours each year to prepare materials for the fund. That time commitment is untenable for many small institutions, especially MDIs, the group added.
Inclusiv’s talking points and a separate policy agenda further encouraged conference attendees to:
–Urge CDFI Fund officials to consult with the NCUA to ensure that the fund’s requirements do not conflict with NCUA rules.
–Request fund officials to add Low Income Targeted Population and Other Targeted Population methodologies to the program’s Targeted Market Methodologies.
–Ask CDFI Fund officials to change its Financial Interest Policy to allow credit union board members to obtain loans from their institution. “Credit unions are financial cooperatives that are member-owned and member-governed, and that must treat all members equally—a principle the Fund undermines with this proposal,” the group stated.
–Push fund officials to decrease the amount of time it takes to process applications for Target Market modifications. “The Fund’s lengthy and onerous modification process can prevent CDFIs from rapidly responding to dynamic changes that frequently occur in CDFI Target Markets,” Inclusiv said.