Yesterday, the Department of the Treasury announced it will begin reviewing current CDFI-certified financial institutions in an effort to “identify potential violations of applicable law or CDFI requirements and to help ensure that CDFIs that receive federal assistance act as proper stewards of taxpayer funds,” the announcement stated.
“CDFIs play a critical role in expanding access to capital in underserved communities,” said Treasury Secretary Scott Bessent. “CDFIs that engage in predatory practices and take advantage of the very communities they are intended to serve will be reviewed and, where appropriate, held accountable. We remain committed to enforcing the law and protecting taxpayer resources while supporting the mission of responsible CDFIs.”
The statement also noted that this review is part of the Treasury’s plan to increase oversight of federal grant programs, increase accountability, and prevent abuse.
In response to the Treasury’s announcement, President and CEO of America’s Credit Unions, Scott Simpson, issued a joint statement with Inclusiv President and CEO Cathie Mahon, noting credit unions’ trusted history as CDFIs and asking them to avoid negatively affecting credit unions in their mission to identify wrongdoers.
The statement reads, “Credit unions have proven themselves to be trustworthy partners for people and communities through the CDFI Fund, and the commitment and impact credit unions have through this program are undeniable. CDFI credit unions have deployed hundreds of billions of dollars to support mortgage lending, consumer financing, and small business capital within their local communities, spurring economic growth across the country.
“We recognize the need for transparency and efficient oversight to protect taxpayers and support responsible lending standards for CDFIs,” it continued. “Indeed, highly regulated, not-for-profit credit unions are leaders in serving low-income people and communities safely and affordably. We urge officials to focus on solutions that target unregulated bad actors without compromising trusted stewards.”
The announcement does not say when these reviews will officially begin, nor if/how credit unions will be involved.
