Banking & Credit

Groups Urge Changes to the CDFI Certification Requirements

CFA joined national and state-based groups on a comment letter to the CDFI Fund regarding its proposed changes to the CDFI certification requirements. While the statute requires that CDFIs have community development as their primary mission, in recent years, we’ve seen CDFI designation go to some lenders making very high-cost loans  or engaging in other abusive practices. The letter further addresses concerns that some mortgage lenders are seeking CDFI certification primarily to enjoy other privileges, like the regulatory exemption for CDFIs from the mortgage ability-to-repay requirements under Dodd-Frank. Finally, the letter urges a bright-line eligibility requirement of a 36% fee-inclusive APR cap under the Military Lending Act (or lower where required by state law), as well as product protections on mortgages.