CDFI's New `Economic Distress' Criteria may Negatively Affect CUs Ability to Serve, NAFCU Says
ARLINGTON, Va.-Treasury's amendments to the Community Development Financial Institution's Fund criteria for economically distressed areas may have a negative impact on credit union's ability to serve those distressed areas, NAFCU President and CEO Fred Becker wrote in an official comment letter. Treasury's revised interim rule alters the criteria of `economic distress,' at least one of which must be met in order for an area to qualify as an `investment area.' According to Becker's letter, Treasury determined that the qualifier of a loss of at least 10% of a county population and the county net migration loss of at least 5% are no longer necessary. Credit unions, with NCUA's permission, can adopt investment areas in addition to their regular field of membership. NCUA's rules regarding serving an investment area are directly tied to Treasury's definition and, therefore, NAFCU urged Treasury to "carefully scrutinize the revisions to the CDFI Program for the impact they will have on the availability of financial services to our nation's underserved communities, and to refrain from implementing any changes in definition or in the CDFI criteria that might result in curtailing the opportunity to offer low-cost credit union services to underserved segments of the population who might otherwise qualify for such services."