Removing Barriers Blog

Get Prepared Now for the CDFI Fund’s FY 2020 Financial Assistance Application Season
Posted October 08, 2019 by CUNA Advocacy

Established by the Riegle Community Development and Regulatory Improvement Act of 1994, the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) was created for the purpose of promoting economic revitalization and community development through investment in and assistance to specialized community-based financial institutions known as Community Development Financial Institutions (CDFIs)—more than 25% of the roughly 1,100 certified CDFIs across the country are credit unions.

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. 

Through its Community Development Financial Institutions Program (CDFI Program) as well as the Native CDFI Assistance Program (NACA Program), the CDFI Fund offers both Financial Assistance and Technical Assistance awards to CDFIs. These competitive awards can be used by organizations, including credit unions, to meet the community development finance needs of distressed and underserved communities. In general: 

  • Financial Assistance (FA) awards are made in the form of loans, grants, equity investments, deposits, and credit union shares, which CDFIs are required to match dollar-for-dollar with non-federal funds, to meet the demand for affordable financial products in economically distressed communities; and 

  • Technical Assistance (TA) grants are offered to CDFIs and organizations certifiable as CDFIs to build their organizational capacity. 

The CDFI Fund also provides Healthy Food Financing Initiative Financial Assistance (HFFI-FA) awards, Disability Funds Financial Assistance awards (DF-FA), and awards for investments in Persistent Poverty Counties through the CDFI and NACA Programs.  

In fiscal year (FY) 2018, 55 credit unions received CDFI Program and NACA Program assistance awards. While the CDFI Fund has not yet announced its FY 2019 CDFI and NACA Program FA awards, 29 credit unions did receive an FY 2019 TA award through these programs. 

Certification as a CDFI is a statutory requirement to apply for an FA award through the CDFI and NACA Programs. In the past, organizations that were not certified as CDFIs could still apply for an FA award as long as they were certified by time the awards were announced. This effectively meant organizations could apply for certification as a CDFI and an FA award simultaneously.  

However, the CDFI Fund recently announced that this practice will change when the FY 2020 application round opens in early calendar year 2020. For this coming application round, all CDFI and NACA Program FA applicants must be certified CDFIs as of the date the Notice of Funds Availability (NOFA) is published in the Federal Register.  Any organization, including credit unions, that are not certified as a CDFI at the time the NOFA is published in the Federal Register will be ineligible to apply for an FA award.  

It is important to note that this will not impact organizations applying for a TA award—certification as a CDFI is not a requirement to apply for a TA award. TA awards are provided to organizations that can become certified as CDFIs within a three-year period. 

Credit unions that are not yet certified as CDFIs but are contemplating the submission of a FA awards application should submit their CDFI certification application as soon as feasible. According to the CDFI Fund, it can take up to 90 days to process a certification application. The CDFI Fund does accept certification application on a rolling and ongoing basis. In addition for those credit unions with the low-income designation (LID), the National Credit Union Administration (NCUA) and the CDFI Fund have developed a streamlined certification process that can significantly reduce the processing time. 

Finally, credit unions and other entities certified as CDFIs must also be recertified on annual basis.  The CDFI Fund has detailed instructions and provides assistance to those credit unions seeking help in this process.    

For more information, contact the CDFI Fund online