CUNA raises CDFI concerns to Treasury

CUNA sent a letter to CDFI Fund Director Jodie Harris regarding reports concerning credit unions being awarded a CDFI designation only to be revoked until they cure perceived deficiencies.

“Multiple credit unions have indicated they have been told their CDFI designation may be revoked due to the demographics of their democratically elected board,” the letter reads.” Credit unions report an absence of meaningful guidance from the CDFI Fund about the specifics of how the demographics of their particular board is insufficient and how they might be able to cure the deficiencies, leaving them unable to determine whether the actions available to them under the credit union’s bylaws and chartering laws would even permit them to take action to cure the issues within the limited cure periods permitted by the CDFI Fund.”

These credit unions report that the facts or circumstances deemed deficiencies are often present throughout the application process, cannot be changed retroactively, and the CDFI Fund offers little or no guidance on how they can be cured within very limited time frames permitted by the Fund. Credit unions further report a significant backlog in processing applications, with multiple credit unions having to wait a year for a determination of their application, delaying their opportunity to apply for grants or to issue secondary capital.

 

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