Funding for Three Key Programs Affecting CUs Considered
WASHINGTON-Keeping the escalating federal budget deficit in mind, the House Appropriations Subcommittee on Veterans Affairs, Housing and Urban Development and Independent Agencies marked up its appropriation legislation for fiscal year 2004 last week Included in the appropriations are the Central Liquidity Facility, Treasury's Community Development Financial Institutions Fund, and Treasury's Community Development Revolving Loan Fund. The subcommittee is recommending just $51 million, the administration's request, for the CDFI provides funds to institutions that serve distressed communities and low-income individuals. Prior to the subcommittee markup, CUNA had written a letter urging the approval of at least $80 million for the CDFI for FY2004. According to CUNA President and CEO Dan Mica, the fund has been "severely under-funded" in recent years, the July 10 letter read. In FY2001, the fund received $118 million but by FY2003, the administration only requested $68 million, though the fund ended up with $75 million. CUNA Vice President of Communications and Media Outreach Pat Keefe said that CUNA is very disappointed in the subcommittee's appropriation but that there are plenty of opportunities prior to enactment to work on making changes. Another big change occurred in the administration of the CDRLF, which is run by NCUA. Congress provided its usual $1 million to the fund, as opposed to NCUA's request for $2 million citing the need to turn away nearly $1 million in technical assistance grants last year. In the past, the CDRLF has been divided about 70%/30% into low-cost loans and grants to low-income credit unions. However, for the FY2004 appropriation, the subcommittee has recommended that all the funds go to technical assistance grants. NCUA has been using the interest made off the loans to make more loans and grants. In April, NAFCU had sent a letter supporting NCUA's request for $2 million for the CDRLF. In making the recommendation for the CDRLF appropriation, the subcommittee also strongly urged NCUA to partner with HUD to expand credit unions services in public housing developments to combat payday lenders and check cashers. Finally, the subcommittee maintained the CLF's borrowing authority at $1.5 billion, higher than the pre-Y2K level of $600,000, but far lower than statute allows (12 times capital and surplus). The CLF was also provided a $310,000 operating fund. CUNA and NAFCU were accepting of the cap but prefer to return to the statutory limit of 12 times capital plus surplus.