NEW YORK—President Obama’s 2017 budget includes $245.9-million for the Community Development Financial Institution Fund. If the funds survive Congress, it would mark the largest CDFI appropriation in the history of the fund, up from $233.5 million in 2016.
The National Federation of Community Development Credit Unions noted that central to the Obama Administration's efforts to promote financial inclusion are community development credit unions, “because they provide the safe and affordable products and services that low-income consumers need to succeed financially.”
The Federation further noted that also included in the President's budget proposal is a line item for which it has advocated: $10-million appropriation to establish a new Small-Dollar Loan Fund to help all community development financial institutions address the issue of predatory lending in their communities by providing an alternative to payday lenders.
Meanwhile, Amias Gerety, U.S. Treasury's Acting Assistant Secretary for Financial Institutions, said during remarks at the 2016 National Interagency Community Reinvestment Conference in Los Angeles that Treasury is moving forward on its commitment to connect millions of unbanked and underbanked Americans with access to the financial system.
His remarks highlighted the recent agreement signed between the CDFI Fund and NCUA to double the number of CDFI credit unions and the revamping of the fiscal year 2017 CDFI application to foster applicants "that increase the availability/utilization of banking services for unbanked and underbanked populations," a major thrust of the Federation's advocacy, the Federation explained.
“Throughout this past fall, the Federation has been in close discussions with Treasury and the CDFI Fund on how the Fund can be a powerful vehicle for directing Treasury efforts to reach and engage more underserved consumers by placing a greater emphasis and value on retail banking and consumer financial products and services,” the Federation stated.
At the meeting, Federation President and CEO Cathie Mahon participated on a panel addressing an audience of primarily bankers and bank regulators on how CDFIs are finding innovative solutions to promoting a more inclusive financial system, and how banks can partner with credit unions to achieve these goals and meet their community reinvestment obligations.
Mahon highlighted key Federation initiatives to reach and serve underserved populations including financial counseling and coaching, small-dollar lending initiatives such as Borrow and Save, and the development of CU Impact, a customized CDCU core data processing platform that will enable credit unions to extend their reach and impact to low-income consumers, the Federation explained.