January 13, 2022

NAFCU voices concerns regarding Treasury’s CDFI Fund application backlog

treasuryNAFCU Vice President of Regulatory Affairs Ann Kossachev wrote to the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) Wednesday requesting enhanced transparency and communication on pending applications for credit unions seeking CDFI certification.

“NAFCU and its member credit unions appreciate Treasury’s commitment to the CDFI Fund, which equips financial institutions with greater resources to offer Americans more affordable credit and financial services,” wrote Kossachev. “However, NAFCU is concerned about the current CDFI application backlog and the lack of communication from the CDFI Fund or Treasury to applicants.”

In the letter, Kossachev requested the Treasury Department work to allocate more resources to address the application backlog and streamline the CDFI application process as soon as possible. In addition, she asked that the Treasury Department communicates openly with applicants regarding expected delays and expected approval times throughout the application process.

“[A] failure to be forthright with applicants can result, and is currently resulting, in applicants becoming disillusioned with the application process, and potential applicants becoming hesitant to enter a complicated and costly endeavor with an indefinite end date.”

In addition, Kossachev asks the Treasury and CDFI Fund to increase their support of CDFI mortgage lending programs, including for first time homebuyers, and work with the NCUA to expand resources for CDFIs.

Read the full letter. Of note, NAFCU Vice President of Legislative Affairs Brad Thaler in July offered support for increased funding for CDFIs, noting that the programs have been an "invaluable means of providing financial services to underserved areas." The association has also previously called on Treasury to address the CDFI backlog, has advocated for the FHFA to consider purchasing mortgage loans from CDFIs to help underserved borrowers, and has joined with Inclusiv to advocate for the facilitation of secondary capital.