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CU Strategic Planning

CDFI Fund Data Could Force Changes to Controversial Application Recommendations

Proposed Application Process Would Exclude ‘Significant Swaths’ of Credit Unions



A newly released CDFI Fund report might have forced the delay of a meeting that would have provided recommendations regarding the proposed updates to the CDFI Fund certification application process. The data in the report point to just one possible outcome: It’s imperative upon the CDFI Fund to reconsider its proposal and the impact it would have on credit unions’ participation.


The FY 2021 activities of the CDFI Program and NACA program Financial Assistance Award recipients showed that despite accounting for less than one-quarter of CDFI Fund award recipients, credit unions account for more than 89% of all loans. That’s 13 times the banks, 22 times the loan funds and more than 2,000 times the venture funds.


Given that proposed CDFI Certification changes could exclude “significant swaths” of credit unions, this report provides overwhelming evidence of credit unions’ significance to the mission of the CDFI Fund and lending to the historically disenfranchised.


In fact, credit unions are delivering the greatest impact nearly across the board:

  • Credit unions provided 93% of all consumer loans reported to the CDFI Fund in 2021.

  • Credit unions also provided the largest number of home improvement and purchase and residential real estate loans, at a rate 4X that of banks and nearly 8X that of loan funds.

  • Banks and loan funds led credit unions only in business/microbusiness lending and commercial real estate.

Credit unions also lead for:

  • Lower interest rates compared to every other CDFI type for business/microbusiness, commercial real estate, home improvement/purchase and residential real estate (interest rate data are not collected for consumer loans).

  • Longer loan terms, making the loans more accessible than every other CDFI type.

  • Providing 92% of all reported loan dollars that went to low-income consumers.

  • Making $13.8 billion in loans across all categories of distressed borrowers – more than all the other CDFI types combined.

  • Providing five times more loans to Persistent Poverty Counties than those granted by loan fund CDFIs, despite the number of loan fund award recipients numbering nearly three times that of credit unions. This number is especially notable, given that congressional appropriations carved out funds specifically devoted to lending in Persistent Poverty Counties.

Ignoring credit unions’ results in support of the CDFI Fund mission shown in the data from its own report would be folly on the CDFI Fund’s part. It is incumbent upon the CDFI Fund to rethink the proposed changes to the application process, which would eliminate many credit unions from its programs.

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