WASHINGTON— Credit unions that serve the military could be limited in their ability to become certified as a Community Development Credit Union—and therefore limited in their ability to serve the underserved—as a result of the new CDFI Target Market assessment methodologies which go into effect in April, according to the Defense Credit Union Council.
The DCUC sent a letter raising its concerns to leaders of the House Financial Services and Senate Banking, Housing, and Urban Affairs committees.
“Military bases are not typically located near affluent or even most middle-class neighborhoods and have historically been well outside city limits. Additionally, military personnel are no different in terms of meeting the threshold for the CDFI Fund’s Low Income Targeted Population levels under the established criteria,” stated DCUC President and CEO Anthony Hernandez. “Finally, the military is currently struggling with food insecurity, a lack of adequate spouse employment opportunities, access to affordable daycare along with the struggles of being far away from family members who can help.”
DCUC contends the Target Market Methodologies “conflict with legal restrictions on obtaining racial, disability, or other demographic data per the Equal Credit Opportunity Act and Regulation B.
‘Burdensome & Costly’
“They would preclude defense credit unions from legally obtaining this data. Other options to satisfy legal requirement are simply too burdensome and costly, particularly for smaller credit unions such as those on the installation,” stated Hernandez. “The result is many defense credit unions would be unable to maintain or become CDFI-certified and obtain Federal funding for their military and veteran communities. This downstream effects on the military community make this unacceptable for those who wear our nation’s cloth.”
DCUC added that it is asking the committees to “review these methodologies and determine whether a legislative fix is in order.”
As CUToday.info also reported CUNA is also sharing concerns over changes to the CDFI Fund (see related story).
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