ICBA and other groups requested a meeting with members of Congress to discuss a Treasury Department proposal that would reduce access to services provided by Community Development Financial Institutions Fund-certified depository institutions.
CDFI Certification: In a joint letter, the groups expressed concerns with proposed updates to the CDFI Fund’s certification application and guidance. The proposal would rescind CDFI certification for depository institutions that offer certain loan features, such as balloon mortgages, designed to meet the unique needs of their customers, such as those with low or moderate incomes and those who live in rural areas.
ECIP Implications: The groups also said the changes could upend the Biden administration’s plans to infuse more than $8 billion into distressed communities through the Emergency Capital Investment Program. As ICBA detailed in a separate comment letter to Treasury and during a recent congressional briefing featuring Robbie Barnes, president and CEO of PriorityOne Bank in Magee, Miss., CDFIs that lose their certification due to the changes contemplated by the CDFI Fund could be required to return ECIP funds to Treasury—undermining the program.
Procedural Issues: The groups also expressed concerns that the CDFI Fund’s release of the application updates under the Paperwork Reduction Act was procedurally inappropriate and did not allow for sufficient consideration of stakeholder feedback. Instituting major CDFI Fund policy changes that will take effect in April goes well beyond simple information collection and requires a formal rulemaking process with adequate opportunity for public comment, as required by the Administrative Procedures Act, the groups said.