TACOMA, Wash.– The CDFI Fund has begun issuing notices of noncompliance to CDFIs that are still in the performance or reporting periods for CDFI Awards but lost certification after failing to submit recertification applications last year, according to CU Strategic Planning.
The company, which is the leading firm for obtaining grants from the CDFI Fund for credit unions, said institutions can cure the noncompliance by submitting a new certification application by May 1 or requesting additional time by April 10. Doing so places them in a cure period, suspending the noncompliance until at least August 1, CUSP added.
What It All Means
“Most affected institutions likely skipped recertification because they could not meet the updated standards,” CU Strategic Planning said in a blog post. “The cure period provides a narrow window to reapply using 2025 lending data instead of 2024 figures. For some, that shift alone may be enough to regain compliance.
“Others will have a more difficult path—particularly those that remain below the required threshold of 60% of loans by number and 60% of loans by dollar volume to their target market, or that are not prepared to reapply quickly,” the company added.
According to CU Strategic Planning, the notices do not clarify how much additional time may be granted. The analysis added there is no indication that extensions would be long enough to incorporate 2026 lending data.
The Risk of Sanctions
“The notices cite standard assistance agreement language allowing the CDFI Fund to require repayment of award funds. In practice, that outcome appears unlikely,” CU Strategi Planning explained. “Based on our experience across hundreds of awards, we have seen occasional noncompliance notices but no instances of credit unions that we work with being required to return funds.
“Historically, the CDFI Fund’s focus has been on ensuring funds are deployed to consumers and communities in need—not clawed back,” the company added. “Given how many institutions are struggling under the revised certification requirements, some flexibility is likely.”
CU Strategic Planning said it is working directly with a number of credit unions that received notices and are advocating on their behalf.
“While repayment risk appears low based on past precedent, noncompliance should still be treated as a serious issue,” it stated.
