Senators echo concerns with CDFI application change

Senate Banking Committee members Mark Warner (D-Va.) and Mike Crapo (R-Idaho) encouraged the Treasury Department to consider all comments responding to its proposal to revise Community Development Financial Institution certification application and reporting requirements.

Joint Letter: In a letter to Treasury, the lawmakers cited stakeholder concerns with the proposal and said the CDFI Fund’s proposed changes must preserve the ability of CDFIs to be creative and flexible with historically underserved borrowers.

ICBA Briefing: ICBA community banker Robbie Barnes last month briefed congressional staff on the negative impact of the ICBA-opposed proposal to rescind CDFI certification for banks that offer loans with annual percentage rates greater than 36% or originate balloon mortgages. The president and CEO of PriorityOne Bank in Magee, Miss., said the proposal would harm CDFI banks—particularly those that have received Emergency Capital Investment Program funds—while preventing other banks from seeking the certification.

ICBA Comments: In a previous comment letter to Treasury, ICBA said some community banks offer products with these characteristics due to the unique situation of their customers, such as those with low or moderate incomes and those who live in rural areas. These revisions would hamstring CDFI banks and remove their ability to tailor products to these populations, ICBA said.