House Appropriations Committee Passes Bill with $300M for CDFI Fund, $2M for CDRLF

CUNA supported appropriations levels for two credit union-related funds in the Financial Services and General Government (FSGG) Act for Fiscal Year 2020 in a letter to House Appropriations Committee leadership Tuesday. The NJCUL also contacted committee member Rep. Bonnie Watson Coleman (D-12) and in March asked members of the state’s delegation to add their names to a “Dear Colleague Letter” encouraging appropriations for both funds.

The committee passed the bill Tuesday.

The legislation allocates $300 million for the Treasury’s Community Development Financial Institution (CDFI) Fund, a $50 million increase over last year. The fund makes capital grants, equity investments and awards for technical assistants to certified CDFIs.

As of May 1, there are 291 credit unions out of 1,083 certified CDFIs nationwide. Three of New Jersey’s ten CDFIs are credit unions, 1st Bergen FCU, New Community FCU and North Jersey FCU.

CUNA also supported $2 million in funding for NCUA’s Community Development Revolving Loan Fund (CDRLF). The CDRLF funds a revolving loan program and a technical assistance to help credit unions serving low-income communities:

  • Provide financial services to their communities;
  • Stimulate economic activities in their communities, resulting in increased income and employment; and
  • Operate more efficiently.

The subcommittee’s report released Monday contains language that:

  • Calls on federal financial regulators to study the impact of the current expected credit loss (CECL) standard;
  • Directs NCUA to issue a report on its efforts to support and advance community development credit unions in low-income communities;
  • Encourages the Treasury to work with the Financial Literacy and Education Commission to develop materials to serve at-risk groups;
  • Urges Treasury’s Financial Crimes Enforcement Network (FinCEN) to work with regulators and financial institutions on innovative approaches to detecting and combating money laundering and terrorist financing;
  • Dedicates $10 million to a Small Dollar Loan Program to encourage Community Development Financial Institutions to address the issue of predatory lending in their communities and provide an alternative to payday lenders.

It also contains language rejecting the administration’s budget proposal request to place the Consumer Financial Protection Bureau (CFPB) under the appropriations process.