WASHINGTON-While a new Senate bill aimed at strengthening the CDFI fund is being welcomes, CU Strategic Planning, a Callahan company believes the ratio of number-to-dollar amount of loans required should be reconsidered.
As the CU Daily reported here, the bipartisan Advancing Financial Opportunities through Revitalizing and Developing CDFIs (AFFORD) Act, introduced by Sens. Steve Daines (R-MT) and Mark Warner (D-VA), already has nearly 30 additional Senate co-sponsors.
CU Strategic Planning noted the legislation incorporates elements from several previously introduced bills, and of “significant importance to CDFI credit unions is the CDFI Fund Transparency Act (S. 2704), which requires the Secretary of the Treasury to testify annually before the Senate Banking and House Financial Services Committees on CDFI Fund operations.”
‘Greater Transparency’
“The provisions of the bill that require the Secretary of the Treasury to testify annually before Congress both create greater transparency and allow the CDFI Fund to better communicate how CDFIs have a powerful impact on their communities,” CU Strategic Planning President Stacy Augustine said in a statement.
Added Mike Beall, CU Strategic Planning’s chief experience officer, in a statement, “The AFFORD Act makes it a priority that the CDFI Fund report to Congress annually and testify before Congress on how the CDFI Fund is implementing the programs that are founded in statute. We welcome this action and look forward to conversations on how the program is operating and to develop ways for it to accomplish even more with the funds it has be appropriated.
“We urge Congress to be aware of the regulatory burdens being created by the CDFI recertification process that create an environment where credit union lose or walk away from the CDFI certification,” Beall added.
Requirement Should be Reviewed
Bell noted that CDFIs are currently required to make 60% of the number of loans and 60% of the dollar amount of loans in their target market area, and said he believes the requirement should be reviewed, “to eliminate unintended consequences that may see the number of credit union CDFIs fall sharply in 2026.
“It is possible for a credit union CDFI to lend more than 70% of the total number of loans to its target market of Low-Income Targeted Populations and Investment Areas and still not qualify as a CDFI because of the dollar-size of loans to a minority of members who are not in the target market,” Beall added.
