Credit union groups applauded the Treasury Department's announcement Monday that it will launch a review of Community Development Financial Institutions (CDFIs) to ensure they are within the bounds of laws and regulations.
Scott Simpson, president/CEO of America's Credit Unions (AmCU), and Cathie Mahon, president/CEO of Inclusiv, which represents credit unions that are CDFIs, issued a joint statement supporting Treasury's plan.
"We recognize the need for transparency and efficient oversight to protect taxpayers and support responsible lending standards for CDFIs," Simpson and Mahon said. "We urge officials to focus on solutions that target unregulated bad actors without compromising trusted stewards."
The Defense Credit Union Council also issued a statement supporting a review that exposes violations of the law or of the CDFI mission.
"Taxpayer dollars must be protected, and any genuinely predatory actor should be held accountable," DCUC said. "But Treasury's review should be targeted, transparent and grounded in clear standards — not used to cast doubt on the many responsible CDFI credit unions serving underserved and military communities with safe, affordable financial products."
Monday's news release from Treasury said the review is intended to "help ensure that CDFIs that receive federal assistance act as proper stewards of taxpayer funds."
"CDFIs play a critical role in expanding access to capital in underserved communities," Treasury Secretary Scott Bessent said. "CDFIs that engage in predatory practices and take advantage of the very communities they are intended to serve will be reviewed and, where appropriate, held accountable. We remain committed to enforcing the law and protecting taxpayer resources while supporting the mission of responsible CDFIs."
AmCU and Inclusiv said the review is a response to the September 2025 bankruptcy of Tricolor Holdings of Dallas, a subprime auto lender and used car dealer. Tricolor was founded in 2007 and focused its business on Hispanic customers. It was certified as a CDFI in 2019. Its executives have been charged with conspiracy, bank fraud and operating a Continuing Financial Crimes Enterprise.
Mahon told CU Times it supports Treasury making sure CDFIs don't engage in harmful practices to wrongly profit from consumers.
"If one slips through, we want to make sure the Treasury Department takes appropriate action ... to root out predators," Mahon said.
As of Jan. 13, credit unions make up 446 of the nation's 1,383 CDFIs, making them the biggest single depository institution type.
AmCU and Inclusiv said every CDFI dollar granted to a credit union generates at least $8 in private investment, including new storefronts, renovated homes and revitalized Main Streets. CDFI credit unions have active loans totaling $82 billion in community mortgage lending, $86 billion in local consumer financing, $30 billion in lending to local businesses, and $17 billion in affordable small-dollar loans and alternatives to payday loans.
Mahon and Simpson said credit unions have proven themselves to be "trustworthy partners for people and communities through the CDFI Fund, and the commitment and impact credit unions have through this program are undeniable. CDFI credit unions have deployed hundreds of billions of dollars to support mortgage lending, consumer financing and small business capital within their local communities, spurring economic growth across the country."
The Treasury announcement said the review "is part of Treasury's efforts to strengthen oversight of federal grant programs, promote accountability and prevent abuse. Treasury is assessing whether CDFIs are complying with applicable legal requirements and the terms of CDFI Fund assistance agreements."
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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