In a comment letter sent today, the American Bankers Association provided feedback on proposed revisions to the Community Development Financial Institutions Fund’s certification application.
ABA said it supports the goals of the proposed changes, noting that CDFI certification “should not subsidize entities whose products, services or policies do not align with the CDFI Fund’s mission to expand economic opportunity for underserved people and communities,” and that certification standards are “stringent enough to be meaningful, but also flexible enough to allow these mission-driven financial institutions to meet the unique needs of their communities.”
The association remains concerned, however, that the CDFI Fund appears prepared to finalize the certification application changes despite “significant concerns” about potential “on-the-ground impact” of the proposal. “If finalized as currently proposed, the new standards could disadvantage current CDFIs relative to new applicants, make it difficult for CDFIs to offer products and services responsive to community needs, and negatively impact the ability of rural CDFIs to meet certification standards,” ABA wrote. “These results are inconsistent with the fund’s stated policy objectives and will undermine its ability to effectively and efficiently inject federal funds into areas that desperately need support.”
ABA said that without further refinement, the revisions would cause “unintended consequences for CDFI-certified banks and the communities they serve, particularly in rural areas,” and encouraged the Treasury Department to continue its work with stakeholders.