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CDFI Fund anticipates launching application in fall
The Community Development Financial Institutions (CDFI) Fund released an update on where revisions to the CDFI Certification Application stand, saying it expects to begin accepting new certification applications in fall 2023. The CDFI Fund initiated a certification blackout period Oct. 1, 2022, as it proposed changes to the process and application. Under the fund’s initial timeline, it had planned to begin accepting applications through the revised process in April 2023.
“We are deeply concerned that the CDFI Fund continues to give community-based credit unions the runaround,” said NAFCU President and CEO Dan Berger. “From the beginning of their application reform process, we’ve advocated for clear communication and transparency. 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. 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 the update, the CDFI Fund noted it is continuing to review public comments and consult regulatory agencies on updates to the application. The fund plans to release the application form and related materials in advance of its use, and it will also hold public sessions to share details. There will be a grace period for currently certified CDFIs to comply with new guidelines and deadlines while maintaining their CDFI status; NAFCU recommended a three-year grace period in its comments on the application.
NAFCU also sent a letter to leaders of the House Financial Services and Appropriations Committees flagging the extended delay and additional funding concerns related to the Emergency Capital Investment Program (ECIP).
“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,” wrote NAFCU Senior Vice President of Government Affairs Greg Mesack. “This will give them an opportunity to explain the situation and answer the questions of stakeholders who are desperately trying to serve their communities. We are afraid that answers may not be forthcoming otherwise.”
NAFCU has raised concerns to the CDFI Fund and lawmakers that the changes to the Certification Application and process will restrict access to the fund and its resources. Earlier this year, the fund indefinitely delayed the release of the new application as it attempted to work through revisions after public comment. It previously provided FAQs for the blackout period, which announced that organizations seeking certification for the first time prior to the blackout period will now be required to submit a new application within 12 months to demonstrate compliance with the new policies.
The association will continue to engage the CDFI Fund, lawmakers, and credit union members both independently and as part of the CDFI Fund Coalition on these issues. Member credit unions are encouraged to join NAFCU’s CDFI Working Group; contact Senior Associate Director of Legislative Affairs Lewis Plush via email for more details.
In addition, the Federal Reserve is currently conducting a survey of CDFIs to learn more about challenges and opportunities facing these institutions. The findings will provide insights to policymakers, researchers, practitioners, funders, investors, and other stakeholders. CDFIs can participate in the survey until June 2.