Treasury announces review of certified CDFIs

The Treasury has announced a review of certified Community Development Financial Institutions (CDFIs) to “identify potential violations of applicable law or CDFI requirements and to help ensure that CDFIs that receive federal assistance act as proper stewards of taxpayer funds,” according to a statement.

America’s Credit Unions President/CEO Scott Simpson and Inclusiv President/CEO Cathie Mahon issued a joint statement in response:

“Credit unions have proven themselves to be trustworthy partners for people and communities through the CDFI Fund, and the commitment and impact credit unions have through this program are undeniable. CDFI credit unions have deployed hundreds of billions of dollars to support mortgage lending, consumer financing, and small business capital within their local communities, spurring economic growth across the country. We recognize the need for transparency and efficient oversight to protect taxpayers and support responsible lending standards for CDFIs. Indeed, highly regulated, not-for-profit credit unions are leaders in serving low-income people and communities safely and affordably. We urge officials to focus on solutions that target unregulated bad actors without compromising trusted stewards.” 

Treasury’s announcement follows the bankruptcy of a certified CDFI subprime auto lender and used-car dealer whose executives were charged with conspiracy, bank fraud, and operating a Continuing Financial Crimes Enterprise.

Treasury Secretary Scott Bessent acknowledged Monday, “CDFIs play a critical role in expanding access to capital in underserved communities,” and reiterated Treasury’s commitment “to enforcing the law and protecting taxpayer resources while supporting the mission of responsible CDFIs.”

As of Jan. 13, credit unions make up 446 of 1,383 certified CDFIs nationwide, the largest depository institution type. America’s Credit Unions, Inclusiv, and state Leagues will continue to emphasize the credit union difference to the White House and Treasury in support of CDFI credit unions.