WASHINGTON—Reps. Lisa Blunt Rochester (D-DE) and Ashley Hinson (R-IA), along with a group of 20 other congressional co-signers, wrote to Community Development Financial Institution Fund Director Jodie Harris to voice several longstanding concerns and recommendations for the CDFI Fund.
The lawmakers used the current “blackout period” as an example of poor communication and a situation that was not adequately explained to members of the fund, according to NAFCU.
As CUToday.info has reported, the CDFI Fund is holding a six-month blackout period, which began Oct. 1, where it is no longer accepting new applications, in an attempt to update its application process. CDFIs that have not submitted their recertification application, as of this month, will now have to wait until April 2023 to submit applications, causing an inability to retain their CDFI status and a subsequent loss of grant awards under federal programs.
In the letter, the lawmakers also shared concerns over the revised CDFI Fund application. The fund in early October released a first look at the revised application and Annual Certification Data Collection Report (ACR), as well was revisions on its data collection mechanisms.
As CUToday.info has also reported and as NAFCU noted, the agency in September also issued supplemental guidance on CDFI certification and published a CDFI Certification Cure Period FAQ guide to inform CDFIs how to resolve certification-related deficiencies during a cure period.
‘Insufficient Communications’
However, many institutions, including credit unions, have experienced insufficient communications about their CDFI applications and other important topics, NAFCU stated.
The letter requests a response from the fund on a series of questions within 30 days on topics that include:
- The CDFI application backlog many credit unions have experienced
- Changes to what the CDFI Fund accepts, such as stopping the Other Target Population verification process
- How CDFI Fund addresses when a CDFI financial institution is deemed to no longer meet the requirements for certification
- The opportunity for institutions to appeal decertification and “cure” any issues without penalty
- What changes that the CDFI Fund is planning to make going forward with the certification process
- What support and resources the fund plans to provide to help CDFIs meet the updated data collection requirements and whether or not the fund expects to consider comments from the 2020 request for public comment as well as the upcoming comment period to inform the type of support it provides to CDFIs
Request for Comment
The CDFI Fund late last week issued a request for public comment on pre-approved Target Market assessment methodologies related to the CDFI certification process as part of its ongoing efforts to revise the process. To be a certified CDFI, an entity must demonstrate that it serves at least one eligible Target Market and it must direct at least 60% of both the number and dollar volume of its arm’s-length, on-balance sheet financial products to one or more eligible Target Market components.
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