Uncertainty Reigns in CDFI Program
Funding and certification issues remain unsettled.
When it comes to the CDFI program, one thing remains certain—nothing is certain.
With the House unable to elect a Speaker—let alone set FY24 spending levels—the program’s funding remains unclear.
And with the CDFI Fund continuing to struggle with changes to the application and certification process, credit unions and other financial institutions remain uneasy about what the future holds.
“Unfortunately, recent actions by the CDFI Fund have created challenges with CDFI recertification, and the Fund has been in a months-long blackout period in which it is not accepting new applications at all,” NAFCU Vice President of Government Affairs Brad Thaler wrote this week to a Senate Banking Committee subcommittee, which held a hearing on the program Tuesday. “This uncertainty with the Fund has made it more difficult for financial institutions to provide support for the communities the CDFI Fund is intended to help.”
Sen. Cynthia Lummis, R-Wy., the ranking Republican on the Senate Housing, Transportation and Community Development Subcommittee, agreed with Thaler.
“I’m a little disheartened at the Treasury Department, in managing the CDFI Fund, has not given CDFIs the certainty and flexibility to do their work,” she said, as the hearing began.
The fund remains in a blackout period while officials work on the updated application and certification process.
Funding at Issue
With the general uncertainty, the CDFI community also is pushing Congress to ensure the program receives adequate funding in FY24.
President Biden, in his FY24 budget, called for the CDFI program to receive $341 million. The House FY24 Financial Services appropriations bill called for the program to receive $278.6 million—a cut of more than $45 million below the FY23 funding level. The Senate appropriations bill calls for $334 million for the CDFI program.
“For the CDFI Fund, the stakes are high in this negotiation process and the CDFI Fund is facing potential cuts,” the Opportunity Finance Network (OFN), which is holding its annual conference in Washington, D.C. this week, said in material submitted to the Senate subcommittee.
“OFN is urging Congress to adopt a funding level for the CDFI Fund that is aligned with the president’s budget request of $341 million in any final spending bill,” network officials wrote. “We’re encouraging our members to remind Congress just how crucial the CDFI Fund is and to advocate for the highest possible funding by creating new virtual tools for them to reach their elected officials.”