WASHINGTON—CUNA is expressing concerns with the proposed changes to the Treasury’s Community Development Financial Institutions (CDFI) Fund Certification Application in a letter to the fund.
As CUToday.info has been reporting, Treasury has paused applications to the CDFI certification process due to numerous issues that had created a backlog of applications.
“The CDFI Fund’s desire for obtaining high-quality and results-oriented data is understandable, however, there continues to remain very real, very practical barriers to legally obtaining that data without causing harm to banking relationship between CDFI credit unions (CDCUs) and their membership,” the letter reads.
“CUNA reiterates its previously expressed concerns regarding the legality and attendant risk of the obligation to collect, store, and report race, ethnicity, and household income data of its members,” the letter states. “Further, Regulation B does prohibit inquiring into a loan applicants marital status or whether the applicant’s income derives from any public assistance program (including in connection with disability). The requirement to obtain actual data points regarding these personal demographics may also violate state laws.”
CFPB Discussions Cited
CUNA noted the Consumer Financial Protection Bureau’s recent discussion on race and ethnicity inquiries in connection with its small business lending final rule.
“Having undergone an extensive research and rulemaking process, the Bureau eliminated the proposed requirements to collect ethnicity and race via visual observation or surname,” the letter reads.
“Recognizing the very real stakes for small business lenders, particularly those in smaller communities and underserved and rural areas, the Bureau declined to finalize a requirement to obtain ethnic and racial data via visual observation and surname,” the letter adds.
Additional Suggestions
The letter also:
- Suggests the CDFI Fund’s threshold of $100 million for the Small and Emerging CDFI Assistance program is raised and includes minority depository institutions emerging CDFIs
- Discourages setting an upper limit on CDFI credit unions’ ability to access CDFI funding
- Encourages the CDFI Fund to engage in sandbox and pilot programs to determine how to best support the growth of Native American CDFIs
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