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Appeals Court Rules Louisiana CU Must Repay $12.2 Million in CDFI Funds

OnPath FCU is disappointed with the ruling and is considering all options in response to it.

judge signing a court document Credit/Shutterstock

The $624 million OnPath Federal Credit Union must repay more than $12 million it received from the Community Development Financial Institutions (CDFI) fund, an appeals court ruled.

“When an application for federal funding contains materially false information, it’s reasonable for the federal agency to want the money back,” a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit for the Eastern District of Louisiana wrote in its judgement released Friday. “And that is so even if it turns out that the recipient might’ve been eligible to receive the funds on some other basis not presented in the application. No harm, no foul may be appropriate in sports — but it’s not a rule that judges may unilaterally impose on the funding decisions of federal agencies. We accordingly affirm the district court and hold that the agency here did not abuse its discretion by requiring repayment under these circumstances.”

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Peter Strozniak

 

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