Unnecessary Unnecessary Repetition Repetition is is the the Issue Issue With With CDFI CDFI Proposal Proposal, Says Says DCUC DCUC

WASHINGTON — The Defense Credit Union Council is urging Treasury Secretary Scott Bessent to withdraw a new Community Development Financial Institutions Fund requirement that would require certified CDFIs to reapply for certification every five years, arguing the change would create unnecessary regulatory burdens and discourage participation in the program.

In a July 14 letter to Bessent, DCUC challenged a provision in the CDFI Fund’s revised Certification Agreement that limits certification to five consecutive fiscal years and requires institutions to submit a new application before that period expires.

According to DCUC, certified CDFIs already are subject to annual reporting requirements, transaction-level data submissions, compliance reviews and enforcement actions, making a universal recertification process unnecessary.

The Real Issue

“Accountability is not the issue; duplication is,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. He argued that Treasury already has the oversight tools needed to monitor compliance without requiring institutions to restart the certification process every five years.

The trade group said the new requirement would place a disproportionate burden on smaller and midsize credit unions by requiring them to compile detailed lending data, demonstrate continued compliance with target market requirements and complete extensive internal reviews, often with outside legal or consulting assistance.

DCUC cited information from credit union consulting firm CU Strategic Planning, which it said reported that more than a dozen client credit unions chose not to seek recertification because of the administrative burden. The organization also pointed to what it described as an approximately 22% decline in the number of certified credit unions listed by the CDFI Fund between January and June 2026.

Providing Affordable Assistance

DCUC President and CEO Anthony Hernandez said in a statement that CDFI-certified credit unions help provide affordable loans, housing finance, small-business capital and financial counseling in military, rural and low-income communities.

The organization warned that a reduction in the number of certified institutions could limit access to affordable financial services in underserved areas, including communities near military installations.

In its letter, DCUC asked Treasury to suspend the five-year recertification requirement, continue relying on annual reporting and risk-based oversight, and, if periodic renewal is retained, streamline the process by using information already on file. The organization also requested a meeting with Treasury officials and other stakeholders before the new requirement is implemented.