NAFCU supports CDFI, CDRLF funding in House bill; CECL study added
Today, the House Appropriations Committee will examine a funding bill that keeps the NCUA's Community Development Revolving Loan Fund funded at a level of $2 million and funds the Community Development Financial Institutions (CDFI) Fund at its current level of $300 million. Ahead of the committee's markup of the bill, NAFCU Vice President of Legislative Affairs Brad Thaler offered the association's support of the these funding levels.
"These programs help promote access to capital and local economic growth in low-income communities," wrote Thaler. "CDFI credit unions predominantly serve low-income areas and other target markets and often are the only financial services options for consumers that live paycheck to paycheck. The CDFI Fund grant program helps credit unions serve communities and consumers that large banks do not focus on."
The report accompanying the bill also includes NAFCU-backed language directing the NCUA, alongside five other regulators, to conduct a joint study on the economic impact of the current expected credit loss (CECL) accounting standard. The study would be due 180 days – or six months – following congressional passage of this bill.
Last month, NAFCU-supported legislation was introduced in the Senate that would halt the implementation of CECL until a quantitative study could be conducted to determine the standard's economic impact.
NAFCU will continue to work with all stakeholders to obtain relief for credit unions under CECL, but the association is encouraging credit unions to prepare for CECL's 2022 implementation date. Access NAFCU's updated FAQs on the standard here.
Thaler also noted support for the bill's funding of the Small Business Administration's 7(a) and 504 loan programs. "SBA programs are an important tool for credit unions to meet the business lending needs of their members," said Thaler.
The association will monitor today's markup and alert members as the legislation moves forward.
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