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CUNA, its state partners, individual credit unions, and concerned credit union members, saw their heavy lobbying and grassroots efforts pay off today when the Congress proposed a compromise omnibus spending bill for fiscal year 2017. In this bill, Congress fully funds the Community Development Financial Institutions (CDFI) Fund at $248 million. This funding amount of is not only significantly higher than the $233.5 million that was spent in FY 2016 but also more noteworthy given the fact that the Administration requested that the Fund be eliminated in the bill.
CUNA sent a letter to all House Appropriations Committee members, as well as a letter to their Senate counterparts on March 30, 2016, urging them to fully fund the CDFI Fund. There are 288 CDFI credit unions in the U.S. and this is great news for not only them, but the credit union movement as a whole.
A quick backgroundThe CDFI Fund (CDFIF) was established in 1994 by the Riegle Community Development and Regulatory Improvement Act and is administered by the Treasury Department. It makes capital grants, equity investments and awards for technical assistance to community development financial institutions (CDFIs). Examples of CDFIs include community development banks, community development credit unions, community development loan and venture capital funds, and microenterprise loan funds. CDFIs are required to provide a 1:1 match for most of the awarded funds, which are offered on a competitive basis. CDFIs finance community development initiatives such as small businesses, community facilities, and low-income housing. The CDFI Fund also administers the New Markets Tax Credit program, which provides tax credits to Community Development Entities (CDEs) which in turn provide the tax credits to entities which invest in the CDEs.
CDFIs such as Community Development Credit Unions (CDCUs) are charged with supplying low-income, distressed communities with traditional banking services such as savings accounts and personal loans, and offering individuals the tools needed to become self-sufficient stakeholders in their own future. The CDFIF 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).
Credit unions are often the best option for those seeking their services in low-income and underserved areas, and we would urge you to protect their ability to provide credit and financial education resources to those relying on them.
The last time the House voted to decrease funding for the CDFI Fund was last year when Rep. Sean Duffy (Wisconsin) offered an amendment to an appropriations bill to decrease funding to the program by $20.7 million. The amendment failed 166 to 254. Please click here to see how your representative voted.
CUNA is advocating for quick passage of this bill.
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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