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Federation offers streamlining advice to CDFI Fund
WASHINGTON (9/28/11)--The U.S. Treasury's Community Development Financial Institutions (CDFI) Fund could limit burdens on credit unions and other institutions by making its certification of CDFI Fund approved institutions permanent, the National Federation of Community Development Credit Unions has said. The federation recommended that certifications remain permanent unless they are withdrawn by the fund. “The CDFI Fund could ensure continued eligibility as a Certified CDFI more efficiently through an updated, electronic Material Events form coupled with a simple annual data report, and customary monitoring of compliance” through the periodic collection of certain types of data. If this data shows a credit union or institution is no longer meeting CDFI certification requirements, appropriate corrective action, including decertification,” could be taken as needed, the federation said. The comments came in response to the CDFI Fund’s recently request for public comment on ways the agency could reduce burden and ease the certification process. The CDFI Fund could eliminate paperwork by automating several aspects of its registration and certification processes. The federation also recommended the CDFI Fund examine its certification process to determine if the value of the documentation required for each certification test “justifies the cost of collection, preparation, submission and review.” “CDFI certification is a valuable asset and, although we agree that certification applications must be carefully evaluated, we also believe that credit unions applying for certification deserve a timely response,” the Federation added. The federation is confident that the CDFI Fund can streamline its certification process, reduce its administrative burden, and meet the needs of CDCUs looking to qualify for this important designation. The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community. CDFI Fund distributions are merit-based, and a total of $25.7 million in funds were awarded to 25 credit unions under the fiscal year 2011 round of the CDFI Fund Program.
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