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NAFCU: CDFI grants help CUs serve members
NAFCU's Brad Thaler stressed the importance of grants provided to credit unions through the Community Development Financial Institutions (CDFI) Fund to better serve low-income members and underbanked communities ahead of a House Appropriations subcommittee hearing today focused on CDFIs.
Thaler, NAFCU's vice president of legislative affairs, noted the important connection between credit unions and the CDFI program: there were 285 CDFI-designated credit unions as of Nov. 30, 2018, and those institutions held more than 50 percent of total CDFI assets. As a result, the NCUA and Treasury have introduced a streamlined CDFI application for credit unions to encourage more institutions to seek the designation.
"Over the past two years, CDFI credit unions received roughly $70 million in grant funding to aid in their efforts to offer financial services to their low- and moderate-income members," Thaler wrote. "Without the CDFI Fund grant program, many CDFI credit unions would not have been able offer new products and loans that provide financial stability for members and their families."
In addition to helping credit unions in low-income areas serve members in need, the CDFI Fund grant program gives credit unions access to funds that they are not able to raise from the capital markets. Without these funds, "thousands of consumers could find themselves without credit union products, such as small dollar loans, credit builder programs, and access to financial education."
Throughout government funding discussions, NAFCU urged lawmakers to fully fund the CDFI program; that was achieved in the recently passed spending bill, which funded the program at $250 million.
Today's hearing, held by the Subcommittee on Financial Services and General Government, is set to begin at 10 a.m. Eastern.