NCUA’S STREAMLINED CDFI CERTIFICATION OFFERING RUNS FROM SEPTEMBER 12 UNTIL OCTOBER 15 FOR THOSE INTERESTED CREDIT UNIONS
Wednesday, August 25, 2021
For low-income designated credit unions, it is possible to apply for and receive the CDFI (Community Development Financial Institution) status from the CDFI Division within the US Treasury Department.
Those credit unions that have gone through the process will tell you that the standard application process with the CDFI Division is quite demanding, but a growing number of credit unions have applied for and received the CDFI designation.
The primary reason to do so is to become eligible for CDFI grants and loans, normally of a smaller nature such as $15,000 to $25,000 for specific technology initiatives and projects designed to expand services in low-income neighborhoods.
However, with the dramatically increased funding for the CDFI program being requested by the Biden administration and well received by the Democrat majority in the US House and Senate, it is quite likely that the amount of grants and loans – as well as the purposes that those could be approved to be applied to – will become much larger in the next few years.
Some are projecting that half million-dollar CDFI grants and loans are not out of the question, maybe even larger but certainly many more in the six figure range, in years two through four of the Biden administration – particularly if the Democrats maintain control of Congress in the 2022 mid-term elections (not a sure thing, but certainly possible).
Therefore, the interest in applying to become a CDFI approved credit union is increasing.
While all credit unions are not going to be qualified, NCUA offers once each year a streamlined process that is worth looking at if your credit union is interested in the CDFI designation.
Anything that streamlines the CDFI certification process is potentially beneficial for those credit unions interested in the aforementioned CDFI grants and loans
If your credit union can get through the NCUA streamlined process, the challenges of the standard qualifying process can be circumvented considerably. If you do not qualify for the streamlined process through NCUA, the opportunity to still apply directly to the CDFI Division at US Treasury remains.
The NCUA streamlined process offering for 2021 will run from September 12 through October 15.
The below link to the following release from NCUA gives you more information. And, within this release, there are links to additional opportunities to pursue the CDFI designation.
If you are interested in pursuing the CDFI designation, you might want to look into the NCUA streamlined process as worth considering.
Should you find that you are not eligible for the NCUA streamlined process, you can explore the standard application process through another link in the above release.
Do not hesitate to let us know if you need additional insight on this issue. While the application process is something that a credit union must complete itself and no consultant can do it for you, there are some knowledgeable sources that we can refer you to that work these types of applications on a regular basis.
A good place to start on the CDFI process, however, is to see if the NCUA’s streamlined certification program will work for your credit union.
Until next time.