The California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) are doubling-down their efforts toward the Community Development Financial Institutions (CDFI)-certification cure period that looms over credit unions involved in this annual funding.

The Leagues and CUNA have sent the House Financial Services Committee and Senate Banking Committee an aggressive letter requesting intervention with the CDFI Fund and the U.S. Treasury Department for credit unions facing the end of the CDFI-certification cure period, effective Sept. 30.

Background and Context
Sept. 30 is a critical date as the fund will stop taking re-certification applications through April 2023 and is requiring all deficiencies to be cured. With respect to the Emergency Capital Investment Program (ECIP) loan issue, most credit unions receiving this cures-notice had been granted ECIP awards, which are now on hold due to their cures status. This is a snowball effect stemming from the blanket-cures notices.

There is real threat credit unions could lose their certifications until the new application is up and running. As a result, credit unions stand to lose millions in funding granted through the ECIP and will not be rendered until the new application process.

CDFI Fund officials had been saying that the Sept. 30 deadline is not as strict as CUNA and the Leagues were portraying. However, that’s not what is being stated publicly by the CDFI Fund. It would be helpful to credit unions still in the cures-status for the fund to publish a new, flexible deadline publicly in its mass communications.

This Past Summer
In late summer, the CDFI Fund released its CDFI Certification Cure-Related Frequently Asked Questions (FAQs) that it had been promising. During a recent call with National Credit Union Administration (NCUA) officials, the CDFI Fund’s representatives made it clear that when credit unions submit their applications or cure information by the deadline, submissions must be complete and compliant. Credit unions will not have further opportunities for discussion or supplementing their documents after that.

The CDFI Fund instructed applicants to use these FAQs in submitting that documentation, and that it will prioritize entities with ECIP funds from the Treasury that are pending — which was a new development and good news at that time.

However, at that time unfortunately the FAQs release left credit unions only 17 business days to absorb this guidance, act on it, document those actions, and update their applications. For some credit unions, there are millions of dollars of capital infusions hanging in the balance.

For Questions
For CDFI questions, email the Leagues’ Vice President of Social Impact Daniel West. For congressional advocacy questions, email the Leagues’ Senior Vice President of Federal Government Affairs Jeremy Empol.

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