TACOMA, Wash.– CU Strategic Planning is urging the Office of Management and Budget (OMB) to revise several provisions of a proposed government-wide rule governing federal financial assistance, arguing the changes could reduce flexibility, create uncertainty for grant recipients and make key community development programs less effective.
In a comment letter submitted to OMB, CU Strategic Planning said it supports the agency’s goal of improving accountability, protecting taxpayer resources and ensuring federal assistance is administered responsibly. However, the consulting firm, which works with Community Development Financial Institution (CDFI)-certified and emerging CDFI credit unions, said several provisions of the proposal warrant reconsideration.
According to CU Strategic Planning, federal grant programs should remain closely aligned with the purposes established by Congress rather than shifting with changing executive branch priorities.
The firm said the proposal introduces terms such as “federal agency priorities” and “the national interest” without defining them or explaining how they relate to statutory requirements. CU Strategic Planning argued that greater clarity is needed to ensure grant administration remains consistent across presidential administrations and reflects congressional intent. It also said the lack of clear definitions could create constitutional concerns involving the First Amendment.
Binding Government-Wide Regulations Flagged
CU Strategic Planning also expressed concern over OMB’s proposal to replace portions of the existing Uniform Guidance with binding government-wide regulations.
The firm argued that while greater consistency among federal agencies has benefits, excessive uniformity could limit agencies’ ability to administer grant programs that differ significantly in purpose and statutory authority.
According to CU Strategic Planning, agencies should retain sufficient flexibility to tailor program requirements while operating within an overall framework of accountability. The organization recommended OMB retain the Uniform Guidance as guidance rather than converting it into binding regulations.
The consulting firm also said OMB’s proposed implementation schedule for fiscal 2027 awards would provide agencies too little time to revise regulations, update systems, train staff and communicate changes to grant applicants. It recommended extending the implementation timeline to reduce implementation challenges.
Most Significant Concerns
Among the firm’s most significant concerns is a proposal that would eliminate fixed amount awards unless specifically authorized by statute.
CU Strategic Planning said it works extensively with credit unions receiving CDFI Fund Financial Assistance awards, which it described as institutional investments that enable increased lending in low- and moderate-income communities.
According to the organization, Financial Assistance awards made to credit unions are commonly leveraged by approximately 10-to-1 into community lending, producing what it characterized as a strong return on taxpayer investment.
The organization argued that replacing fixed amount awards with reimbursement-based cost accounting would increase administrative complexity without improving oversight.
CU Strategic Planning said many CDFI Fund awards support loan loss reserves rather than individual reimbursable expenses, meaning reimbursement requirements could create unnecessary administrative burdens while reducing the flexibility needed to achieve the programs’ intended public purposes.
The firm urged OMB to preserve fixed amount awards in situations where agencies determine performance-based accountability provides stronger oversight than reimbursement-based accounting.
Additional Objection
CU Strategic Planning also objected to a proposal requiring senior political leadership to review grant awards before they are issued.
While senior officials should establish program policy and oversee grant administration, the organization said requiring review of every award would increase administrative burdens, delay grant processing and make inefficient use of senior staff time without producing corresponding oversight benefits.
If OMB retains the provision, CU Strategic Planning recommended clearly defining references to “federal agency priorities” and “the national interest” and explicitly linking those standards to the statutory authority governing each grant program.
Support for Proposed Revisions
The organization expressed support for proposed revisions governing program income.
According to CU Strategic Planning, allowing grant recipients to retain reasonable earnings generated from federal funds—as long as those earnings continue supporting the original purpose of the award—would reduce unnecessary administrative costs while maintaining accountability.
The firm said current requirements often require recipients to devote significant effort to accounting for relatively small amounts of interest income that must either be returned to the federal government or tracked separately.
Concerns Over Expansion of Authority
CU Strategic Planning also raised concerns over proposed language expanding agencies’ authority to suspend or terminate grant awards based on “federal agency priorities” or “the national interest.”
The organization argued that agencies already possess sufficient authority to terminate awards when recipients fail to comply with applicable laws, regulations or award agreements.
According to CU Strategic Planning, expanding that authority to include broadly defined policy considerations would create uncertainty for grant recipients, particularly regulated financial institutions such as credit unions that incorporate anticipated federal assistance into long-term capital, lending and community development plans.
The organization said greater uncertainty surrounding previously awarded funding could discourage participation in federal grant programs and reduce the effectiveness of programs Congress intended to support.
OMB Urged to Act
In its conclusion, CU Strategic Planning urged OMB to:
- Retain the Uniform Guidance as guidance rather than converting it into binding regulations.
- Preserve agency discretion to use fixed amount awards where appropriate.
- Clearly define references to “federal agency priorities” and “the national interest.”
- Maintain agency flexibility to administer grant programs consistent with governing statutes.
- Extend the implementation timeline to provide agencies adequate time to implement the final rule.
