Today, the CDFI Fund released its revised Community Development Financial Institution (CDFI) Certification Application and related tools. CDFI Certification is particularly meaningful in that it provides eligibility to participate in various CDFI Fund programs for the purpose of promoting community development in distressed and underserved communities. CDFI Certification also opens the door to other federal resources as well as state and local governmental, philanthropic, and private sector investment.
With nearly 1,500 CDFIs headquartered in all 50 states, the District of Columbia, Guam, and Puerto Rico that have total assets in excess of $300 billion, the significance and importance of CDFI Certification has grown substantially since the first organizations were certified as CDFIs, more than 25 years ago.
The revised Application was finalized after an extensive process of public engagement that took place over seven years and reflects the careful consideration the CDFI Fund gave to all of the public comments. The CDFI Fund has published a description of key aspects of the revised Application, which includes descriptions of key changes made in response to public comment.
CDFI Certification provides a framework and benchmarks for evaluating, among other things, an organization’s commitment to community development, its track record for holding to that mission through the Financial Products and Financial Services it provides in distressed and underserved communities, and its accountability to the communities it serves.
We believe the revised Application strengthens the value and meaning of CDFI Certification. Revisions to the CDFI Certification Application are being implemented with the intent of: providing a greater understanding about what it means to promote community development; supporting the growth and reach of CDFIs, especially as it relates to their ability to innovate and take advantage of new technologies; fostering a diversity of CDFI types, activities, and geographies; minimizing burden on CDFIs, while improving data quality and collection methods; and facilitating CDFI Fund efficiency in rendering CDFI Certification determinations.
The revised Application achieves these goals in a practical and equitable manner by specifically:
- providing greater public transparency into the CDFI Certification process;
- collecting information to better understand the characteristics, activities, and impact of the CDFI field;
- strengthening how CDFIs must demonstrate a Primary Mission to promote community development;
- establishing parameters for responsible lending practices for CDFIs;
- providing flexibility in demonstrating service to a Target Market(s) in order to promote lending, growth and innovation; and
- strengthening Accountability standards.
Just because the revised Application is now available, does not mean the CDFI Fund’s job is done! The CDFI Fund is committed to providing guidance and assistance to new applicants and CDFIs seeking recertification as we work together to implement this new process. Education, outreach, and training will serve as our mantra as the real work of implementing the Application begins. We will also continue listening to our stakeholders in order to refine the Application on a regular cycle moving forward.
To ensure they have time to understand and adapt to the revised Certification standards, Certified CDFIs are being provided with a grace period, of up to a year, to submit their application for recertification. Additional information on our process is available, here.
I urge you to review the material accompanying today’s announcement. Stay connected with us to ensure you are receiving the most up-to-date information directly from the CDFI Fund regarding this process. Please do not hesitate to send us your questions about the Application and its related tools, which will help us to improve our guidance information.
We are enthusiastic about moving forward with you as we implement the revised Application and tools.