Van Hollen Touts $90 Million Boost for CDFI Program; Advocates Want More

Senate Financial Services Appropriations Subcommittee Chairman Sen. Chris Van Hollen, D-Md., said Wednesday he is pushing for a $90 million increase in Community Development Financial Institution funding—but witnesses told a Senate Subcommittee much more is needed.

Van Hollen’s proposal would bring CDFI funding to $360 million in FY22. However, witnesses told the Senate Housing, Transportation and Community Development Subcommittee that funding should be increased to $1 billion.

“If there is anything the coronavirus crisis has demonstrated, it is that CDFIs are essential organizations in underserved communities,” Frank Altman, founder and CEO of the Community Reinvestment Fund, USA, a CDFI located in Minneapolis told the subcommittee. “This agency and its programs must have the resources commensurate with the responsibilities and the tasks with which they have been charged.”

The Biden Administration has proposed increasing CDFI funding to $330 million, the same amount that was included in the House-passed version of the Financial Services funding measure. Congress has not yet completed its FY22 appropriations measures.

With additional funding, the CDFI Fund would be able to finish its planned overhaul of the CDFI certification process, said John Holdsclaw, IV, president of the CDFI Coalition, and executive vice president of strategic initiatives at the National Cooperative Bank, in Arlington, Va. Holdsclaw said that Treasury Department officials released a draft certification rule in 2019, but delayed implementation of a new rule due to the pandemic.

Altman agreed, saying that the existing certification rules are constraining organizations from meeting pressing needs.

In a letter to the subcommittee, Brad Thaler, vice president of legislative affairs at the National Association of Federally-Insured Credit Unions said funding also is needed to help the CDFI Fund process a backlog of applications.

“A number of credit unions have applied to become CDFIs in order to better serve the needs of their members but have seen the application process can drag on as they await approval,” he wrote.

In a letter to the subcommittee, Credit Union National Association President/CEO Jim Nussle strongly endorsed the CDFI program.

“The CDFI Fund uses small amounts of federal dollars to leverage significant amounts of private and non-federal dollars and has added a tremendous boost to the CDFI industry (which relies heavily upon private sector funds from corporations, individuals, religious institutions, and private foundations),” he wrote.

Spread the word. Share this post!