The National Credit Union Administration will begin accepting applications on Jan. 24 for federally insured, low-income credit unions that want to use the agency’s streamlined qualification process to be certified as Community Development Financial Institutions.
The new Paycheck Protection Program starts with initial lending limited to businesses who have not received a PPP loan and lending going through Community Development Financial Institutions, Minority Depository Institutions, certified development corporations and microlenders. After a few days the lending options open further.
Treasury Secretary-designate Janet Yellen met with representatives of Community Development Financial Institutions and Minority Depository Institutions and made a commitment on behalf of the Biden Administration to support the program.
Congress is preparing to pass legislation that contains a $12 billion set-aside for the Community Development Financial Institutions program, and extensions of the Paycheck Protection Program, the Troubled Debt Restructuring provisions, and the pandemic-related provisions of the National Credit Union Administration’s Central Liquidity Facility. Congress is combining the coronavirus economic stimulus bill and the FY21 omnibus appropriations measure into one bill totally 5,593 pages.
The staff of the Democratic-controlled House Select Subcommittee on the Coronavirus Crisis reports that in the first round of Payroll Protection Program lending, Community Development Financial Institutions and Minority Depository Institutions were largely excluded.
A new House Democratic economic stimulus plan is the basis for renewed negotiations. Here’s a review of the provisions in it.
Only 118 of the nation’s 5,236 credit unions submitted the voluntary Diversity Survey to the NCUA last year. The NCUA wants to increase participation and is considering a monetary incentive for credit unions. The House Financial Services Committee’s Diversity and Inclusion Subcommittee might try to make participation mandatory.
The coronavirus economic crisis demonstrated the failure of large banks to reach small and minority-owned businesses, Cathie Mahon, president/CEO of Inclusiv told the Community Development Financial Advisory Board Thursday.
Community Development Financial Institutions stepped up to fill that void as much as they could, Mahon, whose trade group represents community development credit unions, told the board. She added, however, that Minority Depository Institutions and CDFIs were hampered in that effort because they need the capital, technical support, and platforms to keep up with the evolving financial services world.
National Credit Union Administration board nominee Kyle Hauptman told the Senate Banking Committee recently that he believes that the NCUA should give credit unions “significant incentives” to become Minority Depository Institutions.
Saying that the economic impact of the coronavirus pandemic crisis has hit low-income and minority neighborhoods the hardest, Senate Democrats Tuesday proposed using Community Development Financial Institutions to funnel billions of dollars into those areas.