By Stacy Augustine

Welcome to the inaugural column of the CDFI Compass, dedicated to helping credit unions navigate the always evolving and frequently confusing landscape of Community Development Financial Institutions (CDFIs). 

In this column, I’ll be providing perspectives and insights on issues that are facing CDFI credit unions, along with best practices and strategic opportunities applicable to all community development-oriented credit unions. There may even be a few hot takes and predictions to keep you ahead of the curve. Is it even possible to stay ahead of the curve these days? Maybe not, but I’ll keep you briefed.

About CDFIs

First, a quick primer on CDFIs. These are financial institutions – credit unions, loan funds, banks or venture capital firms – that are certified by the U.S. Department of the Treasury as serving low-income communities and operating with a goal of expanding economic opportunity by providing access to financial products and services for local residents and businesses. 

CDFI designation opens the door for funding opportunities that make it possible for financial institutions to to better serve those in communities that need it most and excel both operationally and financially.

Why This Column—and Why Now?

For the past few years, even the most seasoned CDFIs have found it hard to keep up with all of the changes. 

• The six-month pause on accepting new certification applications extended to over a year.
• The 2023 Financial and Technical Assistance awards were delayed and combined with the 2024 awards. 
• The new recertification requirements were rolled out at the end of 2023, with all current CDFIs required to recertify—and the deadline for that was changed six months later. 

Frankly, it’s been a lot. 

Lack of Certainty

Now we have a new administration, and between executive orders, memos, and the work of the Department of Government Efficiency (DOGE), there’s no sign that things will be simple or predictable any time soon: 

• The January OMB memo that paused all federal grant funding was blocked and then rescinded, but multiple federal agencies are still freezing funds in defiance of court orders.  
• Initial payments from 2024 FA awards are reaching recipients, but the DOGE-ordered contract reviews could affect the use of external evaluators that the CDFI Fund relies on for award scoring, potentially delaying the 2025 awards.
• The head of the EPA has stated his intention to claw back funds already disbursed as part of the Greenhouse Gas Reduction Fund (GGRF) – which could affect many credit unions planning to take part in the program.
• And of course, the 2025 budget is still being finalized, with the next deadline to avoid a government shutdown coming on March 14. 

Meanwhile, agencies like the Consumer Financial Protection Bureau (CFPB) have effectively paused certain enforcement actions, leaving questions around overdraft fees and lending practices in limbo.

So, the key word in this environment is agility. Even as credit unions stay focused on their mission and long-term strategies, they must be ready to pivot and adjust both products and policies. 

The Good News 

We’ve been keeping a close eye on developments in D.C. and, so far, despite all the other turbulence, the CDFI Fund appears to continue to enjoy strong bipartisan support. 

The CDFI Fund has a track record of consistent or growing appropriations, reflecting broad recognition of the critical role these institutions play in fostering financial inclusion. Newly seated Treasury Secretary Scott Bessent has explicitly endorsed CDFIs, emphasizing how essential they are for underserved communities and local economies.

For CDFIs and community development-focused credit unions, this is a moment of both opportunity and risk. While demand for community-focused financial services grows, external uncertainties—from DOGE contract reviews to fluctuating enforcement priorities—underscore the need for resilience.

Sneak Peek: What to Expect Here

Each month, The CDFI Compass will explore topics that matter most to mission-driven credit unions, including:

• Maximizing CDFI Grant Impact: Designing programs that generate long-term value for members and communities.
• Innovations in Community Lending: Emerging financial products that promote economic mobility.
• The Future of Compliance: Preparing for potential regulatory shifts—and seizing opportunities they present.
• Leadership and Growth Strategies: Balancing mission and margin while scaling impact.

I’ll also keep you updated on legislative developments and offer practical tips to strengthen your credit union’s operational resilience.

Hot Take: Uncertainty is a Call to Action

Here’s the bottom line: Political uncertainty should galvanize, not paralyze, CDFI credit unions. Questions about possible funding delays or regulatory changes are not insurmountable obstacles—they’re a clarion call to refine your strategic vision. If you’re attending this year’s Governmental Affairs Conference (GAC), I encourage you to seek me out. Let’s talk about how to position your credit union for success, even if the federal landscape shifts under our feet.

Let’s Stay Connected

In future installments of the CDFI Compass, I’ll break down real-time developments and share advice on sustaining your mission. Until then, remember: resilience, advocacy, and collaboration are the keys to thriving in uncertain times. 

Have questions or an idea for a future column? Reach out—I’d love to hear from you.

Stacy Augustine is the President of CU Strategic Planning, which works with community development and mission-driven credit unions to change the lives of their members and communities. The firm has certified more than 200 credit unions as CDFIs and secured over $1 billion in award funds. Ms. Augustine can be reached at [email protected].