The Federation recently sent a comment letter to the CDFI Fund on the Interim Rule for the CDFI Fund Program. As a co-founder of the CDFI movement and a CDFI-certified intermediary, the Federation is committed to strengthening the impact of CDFI credit unions. Our comment letter proposes a set a metrics that extend beyond the Fund’s current focus on commercial and real estate lending to include the capture of data on the community development impact of consumer lending, financial services and community development services. Our recommendations are summarized below:
- Align the CDFI certification application with the interim rule to allow applications to provide data on financial services to meet the Target Market requirement.
- Credit unions are regulated and examined financial institutions, therefore the Fund should draw from publicly reported financial information before requesting additional information from CDFIs.
- Credit unions are unique among CDFIs in that they are member owned and governed, therefore credit unions that serve CDFI Target Markets are by definition representative of and accountable to the totality of its targeted populations and markets.
- The Fund is designed to “consider the unique characteristics of Applicants that vary by institution type.” The current system insufficiently values the critical impact of CDFI consumer loans and financial services that help low-income families build assets. Employing the metrics that the Federation is proposing would significantly level the playing field and allow depository institution to more effectively compete for CDFI funding.