WASHINGTON–The Community Development Financial Institutions Fund is soliciting comments concerning pre-approved Target Market assessment methodologies related to the CDFI certification process.
To be a Certified CDFI, an entity must demonstrate that it serves at least one eligible Target Market (either an Investment Area or a Targeted Population), the CDFI Fund explained, adding it must also direct at least 60% of both the number and dollar volume of arm’s-length, on-balance sheet Financial Products to one or more eligible Target Market components. As part of its ongoing efforts to revise how new organizations become Certified as CDFIs and how currently Certified CDFIs meet annual reporting requirements, the CDFI Fund is requesting input on a new list of pre-approved Target Market assessment methodologies that entities applying for certification as a CDFI may use to assess whether the end-users of an entity’s financial products or financial services are members of a pre-approved Target Market.
Additional Changes
“Under the current policies and in the CDFI Certification Application, Applicants must describe and seek approval for each assessment methodology they have used and intend to use to confirm financing activity to their identified Target Market(s),” the CDFI Fund said.
According to the CDFI Fund, in an effort to increase transparency and reduce burden through the revised CDFI Certification Application, the CDFI Fund intends to publish a list of pre-approved Target Market assessment methodologies that applicants and certified CDFIs may use and rely upon to demonstrate that they are serving their identified Target Market(s).
“Only those Target Market assessment methodologies that have been approved by the CDFI Fund may be used when compiling Target Market data under the revised CDFI Certification Application,” the CDFI Fund said. “Through the revised CDFI Certification Application and Annual Certification and Data Collection Report, Applicants and Certified CDFIs will select from a drop-down menu the options in the methodology list that they used for each of their Target Market components (i.e., Investment Area, Low-Income Targeted Population, or Other Targeted Population).”