WASHINGTON—NAFCU joined Inclusiv in a letter to NCUA Chairman Todd Harper requesting assistance with the Community Development Financial Institution (CDFI) certification process based on the Other Targeted Population (OTP) standard.
The letter, signed by NAFCU Senior Vice President of Government Affairs Greg Mesack and Inclusiv Executive Vice President Pablo DeFilippi, emphasizes that in order to become a certified CDFI under current CDFI Fund standards, an entity must direct at least 60% of its financial product activities to one or more approved target markets.
In this case, the letter-writers said, OTP- qualifying populations are identified as:
- African-American
- Hispanic American
- Native American
- Native Alaskan, residing in Alaska
- Native Hawaiian, residing in Hawaii
- And Other Pacific Islander, residing in other Pacific Islands; along with ADA-qualifying Americans
‘Met With Skepticism’
Although credit unions have begun utilizing tools that identify the qualified OTP borrowers, many credit unions that have recently submitted OTP data with their CDFI certification application have had their applications placed on an indefinite hold, the two organizations said. According to Mesack and DeFilippi, since credit unions have an obligation to serve the people in these underserved markets, “their efforts are being met with skepticism by the CDFI Fund.”
“The CDFI Fund is seemingly encouraging institutions seeking CDFI certification to refrain from submitting OTP data if their verification process is not already approved by the Fund,” wrote Mesack and DeFilippi. “This poses a significant problem for several credit unions that may not be able to gain approval for an investment area target market on Accountability grounds, with OTP being their only option for achieving certification.”
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