TACOMA, Wash.–An alarm bell is being sounded over a change made by the federal government that means credit unions have only until Oct. 7 to contact grant-writers to apply for CDFI Funds next year. Credit unions that miss the deadline will not be able to secure any CDFI or NACA Program Financial Assistance until 2022.
The big change has to do with an announcement that has surprised many made by the Treasury Department related to the Community Development Financial Institution Program and the Native American CDFI Assistance Program. Under the change, beginning with the FY 2020 application round, applicants must first be certified as CDFIs as of the date the Notice of Funds Availability (NOFA) is published in the Federal Register. This means that the CDFI Fund will no longer process funding applications and CDFI certification applications simultaneously for CDFI Program at the same time as the application is made, as it has in the past.
“Any organization that is not a certified CDFI as of the date the NOFA is published in the Federal Register that applies without prior certification “will be found ineligible for that funding round,” the CDFI announced.
A ‘Radical Shift’
The change is a “radical shift” by the CDFI Fund and will affect credit unions that don’t act quickly, warned Jamie Strayer, founder of CU Strategic Planning, which has obtained more CDFI grants for credit unions than any other organization, is warning credit unions.’
Strayer noted that 58 of the credit unions with which it has worked to win CDFI awards submittedtheir certification and grant application at the same time when they applied.
“If this rule was in place during that time, $53.5 million in CDFI award dollars would not be currently in the hands of credit unions,” Strayer said. “Additionally, the $2.95 billion they are deploying in loans associated with those grants would not be reaching consumers increasing economic opportunity in their distressed communities.”
Clock Is Ticking
Strayer stressed the clock is ticking.
“These certificationstake 90 days for approval, which means credit unions seeking CDFI certification for the purposes of receiving funding next year must begin right now,” she said. “If you miss out on this round of funding, it will be 2022 before your credit union can receive CDFI grant funding again. That’s a long wait when you have members in need to serve.”
The CDFI Fund announced it is tentatively planning to publish the NOFA for the FY 2020 CDFI Program application round in early 2020. CDFI Financial Assistance awards are available up to $1 million to use as loan loss reserves and capital reserves and other expenses to increase lending, CU Strategic Planning explained.
Technical Assistance awards are available up to $125,000, which can be used to purchase new equipment, hire consulting experts, pay salaries and benefits or train staff and volunteers.
Another Caution
Strayer is cautioning that even if a credit union is already certified, it must still ensure its Annual Certification and Data Collection Reportis submitted on time in order to maintain certification. The report submission deadline is based upon an organization’s fiscal year-end date.
“CU Strategic Planning is accepting only 10 new clients when we open our waiting list on Oct. 1,” Strayer emphasized. “If credit unions have questions about their certification status or application process, CU Strategic Planning is always pleased to help.”
Since its inception, CU Strategic Planning has:
- Certified 119 credit unions as CDFIs
- Authored 123 winning grants for 101 credit unions
- Winners are located in 32 states
- Awards totaling $104 million
- $5 billion in loans as a result of the grants
For more info https://www.creditunionstrategicplanning.com/single-post/2019/09/13/CDFI-Fund-Changes-Certification-Requirements