March 16, 2017

NAFCU touts importance of CDFI program to Congress

NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt emphasized the importance of the Community Development Financial Institutions Fund program in a letter Thursday to the leaders of key House and Senate subcommittees.

Hunt spoke about the strong relationship credit unions have with the CDFI program in the letter, which went to Senate Appropriations Subcommittee on Financial Services and General Government Chairman Shelley Moore Capito, R-W. Va., and Ranking Member Chris Coons, D-Del., and House Appropriations Subcommittee on Financial Services and General Government Chairman Tom Graves, R-Ga., and Ranking Member Mike Quigley, D-Ill.

"As of January 31, 2017, there were 287 credit unions certified as CDFIs," Hunt wrote. "Representing approximately 27 percent of the total number of certified institutions, CDFI-certified credit unions hold more than 50 percent of total CDFI assets."

"Because they are not-for-profit, cooperative financial institutions, credit unions are focused on providing financial services that are in the best interests of their members," Hunt continued. "Since CDFI credit unions predominately serve low-income areas and other target markets, CDFI credit unions are often the only financial services option for consumers that live paycheck to paycheck. The CDFI Fund grant program helps credit unions serve communities and consumers that large banks don't focus on."

Hunt also pointed out that many credit unions cannot raise funds from capital markets, making the CDFI Fund grant program even more important in helping credit unions serve communities.

The preliminary Trump administration budget released Thursday proposes cutting the CDFI Fund program as part of a 4 percent cut to the Treasury Department's budget. The budget would also cut the Small Business Administration budget by 5 percent and the Department of Housing and Urban Development budget by 13 percent.