The Community Development Financial Institutions Fund today released a “considerably revised” process for an organization to apply to become a CDFI or to renew its certification. Among the changes are new requirements regarding documenting mission and strategy, adhering to “responsible financing standards,” defining and serving a “target market,” providing development services, and adjustments to accountability standards for CDFIs.
The changes were the culmination of a six-year process to modernize the CDFI certification process by the CDFI Fund, which is administered by the Treasury Department. ABA last year raised several concerns with the proposed certification standards, saying that some revisions under consideration would have made it difficult for CDFIs to offer products and services responsive to community needs, and would have negatively affected the ability of rural CDFIs to meet certification standards. In a statement, ABA President and CEO Rob Nichols said that while the association reviewing the revised certification application, “we are thankful for Treasury’s commitment to ensuring that CDFI banks are able to meet the needs of the communities they serve.”
A phased approach has been introduced for organizations seeking CDFI certification, according to the CDFI Fund. Phase 1 allows non-certified organizations to apply immediately from Dec. 20, while Phase 2 requires currently certified CDFIs to reapply using the revised application starting on Aug. 1, 2024, with a deadline of Dec. 20, 2024. A grace period will be established to allow existing certified CDFIs to maintain their status and eligibility for CDFI Fund programs until Dec. 20, 2024. The CDFI Fund will also provide early reapplication submission opportunities, enabling 700 certified CDFIs to voluntarily recertify before the general deadline (May 31, 2024–July 31, 2024) and receive determinations by Oct. 31, 2024.
Under the revised CDFI certification policies, new applicants and currently certified CDFIs will be required to submit a transaction level report, or TLR, both as part of an initial application and as part of their annual certification and data collection report submission package. The annual certification report has undergone significant changes, introducing new requirements for organizations certified using the revised CDFI Certification Application. To assist organizations in understanding the changes, the CDFI Fund will host a live webinar on Wednesday, Dec. 13, at 1:30 p.m. EST.
