Amid the expansive setting of America’s Credit Union’s Governmental Affairs Conference, credit union CDFIs had the opportunity to hear from Pravina Raghavan, Director of the Community Development Financial Institutions (CDFI) Fund. On Tuesday, March 4, 2025, Raghavan joined Samantha Beeler, CEO of the League of Credit Unions, for a breakout session focused on the CDFI Fund.
Raghavan is approaching her one-year anniversary as the head of the CDFI Fund. She underscored the critical role credit union CDFIs play in advancing the Fund’s mission, highlighting that 267 Financial Assistance and Technical Assistance awards in the 2024 funding round were granted to credit unions—representing 46% of all winning institutions She also celebrated the success of 57 first-time CDFI credit union awardees, emphasizing the growing impact of credit unions in community development financing.
In her remarks, Raghavan also addressed the process of building the new CDFI certification framework—including the recertification process for all existing CDFIs. She acknowledged the concerns institutions have about this transition and shared key insights:
The CDFI Fund went back to the original statute that created CDFIs to make sure they “checked the boxes” regarding requirements for institutions to certify or recertify, noting this is the first new application since the Fund began in 1994.
The Fund will soon release new “Frequently Asked Questions” guidance to further clarify expectations for CDFIs.
She encouraged institutions to focus on the Low-Income Targeted Population (LITP), emphasizing that historically disadvantaged communities and income levels—not necessarily racial differences—are key considerations.
Adding an advisory board can offer greater flexibility to CDFI credit unions with elected boards of directors in maintaining accountability to target markets.
On issues of importance to CU CDFIs like ODP products or balloon payments on mortgages, Raghavan urged institutions to explain why these offerings are essential to their operations. She stressed that narratives matter, as do additional materials—institutions should not just describe their practices but also explain the purpose behind them. She emphasized that the CDFI Fund is NOT seeking the elimination of fees but wants to see how CDFI credit unions are different in how they use them.
Raghavan made it clear that strong narratives and supporting documents are critical for recertification. Where additional materials are missing, CDFIs may have less than five days after submission to provide them—otherwise, their recertification may be denied.
Raghavan indicated that the CDFI Fund must have these narratives and attachments to make decisions on recertifications. When additional materials are missing, applicants will have less than five days after submission to provide them—otherwise, their recertification may be denied.
She also reassured attendees that the CDFI Fund is not looking to push CDFIs, including CDFI credit unions, out of certification. But she did note she is working with a 30-year-old statute.
The session included several key audience questions. Guardians CU CEO Steve Bosack asked Raghavan about CDFI Fund’s intentions when it comes to clawing back awards. Raghavan clarified that the Fund does not intend to reclaim awarded funds.
CU Strategic Planning’s Chief Experience Officer, Mike Beall, raised concerns about credit union CDFIs struggling to meet the required 60% threshold in both the number and dollar amount of loans. Raghavan encouraged CU CDFIs to submit a recertification to avoid automatically losing their CDFI certification regardless of their numbers to be eligible for a letter with instructions. CU Strategic Planning will be following up with CDFI on this matter – it does not appear that this is possible in the AMIS system at this time.
The director covered several important topics to CDFI credit unions. She started by laying out her philosophy in running the CDFI Fund which focused on making it run more like a business, emphasizing efficiency, business-minded decision-making, and faster response times for CDFIs. She explained her style of working with CDFI Fund staff as asking, “But why?” to ensure the Fund’s processes make sense for those it serves.
Raghavan believes the COVID-19 crisis highlighted the best of what CDFIs can accomplish, and believes the Fund’s pandemic-era programs outperformed the Paycheck Protection Program (PPP) in supporting small businesses. She also offered her future view that investment in CDFIs from the private sector should be expanded to bring other resources to complement federal funding and expand available resources.