CUs Bid to Save CDFI Funding

WASHINGTON – Credit unions weighed in again yesterday to try to rescue the Community Development Financial Institutions Fund, calling on Congress to save the Clinton-era program from Bush-era budget cuts. During a congressional hearing on CDFI funding, Joy Cousminer, president of Bethex FCU, told her Congressman Jose Serrano, who chairs the House Appropriations Subcommittee on Financial Services, how his district has benefitted from services made possible through the CDFI Fund. Cousminer explained how Bethex, founded in 1970 by welfare mothers, has leveraged millions of dollars in grants and loans from CDFI, NCUA and the National Federation of CDCUs, to finance payday loans, low-cost mortgages, check cashing and international remittances in the nation’s poorest congressional district. The CDCU executive asked the newly formed Appropriations subcommittee to budget as much as $100 million for the CDFI Fund, almost four-times what was proposed by the Bush Administration, which sought before to eliminate funding for the program. Cousminer, whose credit union has received as much as $1 million in CDFI assistance, said in the early years assistance was used mainly for straight-forward purposes, like increasing loans and establishing reserves. But in recent years, CDCUs like hers have found increasing challenges financing compliance with the USA Patriot Act and Bank Secrecy Act, as well as the increased threat of fraud and identity theft. The CDFI Fund, the brainchild of National Federation of CDCU Director Cliff Rosenthal, was created in 1994 by the Clinton Administration and has provided as much as $100 million in grants and loans to almost 100 credit unions since then, making credit unions a key component of the program.