WASHINGTON—The Environmental Protection Agency (EPA) is being asked to allow credit unions to obtain funds through the Greenhouse Gas Reduction (GHGR) Fund to support projects that reduce greenhouse gas emissions and air pollution in low-income and disadvantaged communities.
The GHGR Fund was established under the Inflation Reduction Act of 2022 to provide grants for zero-emission technologies, and financial and technical assistance for projects to reduce greenhouse gas emissions and other air pollution.
NAFCU, which made the request, pointed out there is roughly $27 billion available to grant for projects, with $8 billion marked for projects in low-income and disadvantaged communities.
The EPA can award grants through September 2024.
In response to the EPA’s request for information on the fund, NAFCU Vice President of Regulatory Affairs Ann Petros pointed that credit unions are not an “eligible recipient” for direct investment from the fund, but “may obtain indirect investment…as not-for-profit, community- and low-income-focused lenders.”
‘Wealth of Experience’
However, Petros said EPA has the authority to determine which non-profit entities meet the requirements of an “eligible recipient” and indirect recipients that can receive funding.
Petros further highlighted the importance of including credit unions given “their wealth of experience as community-based, cooperative lenders” that will support the long-term success of the GHGR Fund.
“The vast network of credit unions and their partners are prepared to mobilize billions of dollars on their balance sheets to support this effort to promote clean energy and reduce greenhouse gas emissions,” Petros wrote, adding that groups of credit unions certified as Community Development Financial Institutions (CDFIs) are already involved in the GHGR Fund process.
‘Dedicated Green Loan Products’
She said hundreds of credit unions have dedicated green loan products, and “some of NAFCU’s members have already established an eligible non-profit organization, Ecority, through a consortium of credit unions and CDFI credit unions that are ready and willing to assist the EPA in dispersing funds to communities that have historically lacked access to credit.”
Petros advocated against the creation of a national “green bank” to distribute money from GHGR Fund.
“A single entity recipient would lack familiarity with local markets, potentially expose the GHGR Fund to more concentrated risk, and lack the inclusivity necessary to make this program a success,” she argued. “…Instead, the EPA should adopt a community lender, communities first approach and engage community lenders like credit unions as indirect recipients of the available funding in the GHGR Fund. Credit unions and CDFI credit unions are the key to the effective management of and distribution of funding from the GHGR Fund.”
Read Petros’ full letter to the EPA here.
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