Credit union trade group calls for oversight hearings citing delays, lack of transparency.
The Treasury Department's CDFI Fund is poorly managed and is giving community credit unions “the runaround,” NAFCU President/CEO B. Dan Berger charged Monday.
The sharp criticism follows a fund update on Monday stating that the program is still working on a revised application and will reopen for applicants sometime this fall. Berger said NAFCU had asked the fund to be open and transparent about its process in reviewing the application for changes.
“The latest ‘update’ from the fund is the complete opposite—after months of delay, there is still no definitive date of when credit unions can begin applying for CDFI certification and no indication of what revisions are being made,” Berger stated. “The CDFI Fund is restricting access to critical funds with its poor management, and communities in need of these resources are suffering as a result.”
In a letter to the House Appropriations Committee, which funds the CDFI program, and the House Financial Services Committee, which authorizes it, NAFCU Senior Vice President for Government Affairs Greg Mesack said the fund has stopped taking applications without providing justification for such a long delay.
“We believe the money appropriated by Congress for the Fund is not being used to the intent of Congress, and as such, we encourage your committees to hold oversight hearings with the CDFI Fund and Treasury,” he wrote.
The CDFI program published a proposed updated application last fall, which fund officials revealed followed two other proposals that were never adopted.
“The CDFI Fund has been deliberate in its efforts to update the CDFI Certification process,” the fund said Monday, adding that officials had made known they would be “taking the time necessary to carefully review all public comments.”
What Was in the CDFI Update?
In Monday’s update, the agency said it would:
–Begin accepting CDFI Certification applications this fall.
–Continue to review public comments about the certification process, an effort that includes meeting with other regulators about the proposal.
–Make the final application and related materials available in advance of their going into use, in an effort to give stakeholders time to familiarize themselves with the new process.
–Provide currently certified CDFIs with a grace period so they will have sufficient time to prepare for the new application, while maintaining their certification.