14 THE NAFCU JOURNAL May–June 2023 Some of the CDFI’s proposed changes also evaluate products, services and fees of the credit union, which duplicates the regulatory oversight of other agencies, said Moore. “Our position is that the CDFI Fund is not tasked with regulating credit union products, services and fees and should not base certification on something that is already regulated by another agency.” “A lot of the borrowers who benefit from a CDFI’s help are unable to go anywhere else for loans due to their financial circumstance; they are often the only type of loan the member qualifies for,” said Moore. Under the proposed certification standards, an applicant that does not consider a borrower’s ability to repay a loan may be determined ineligible for CDFI certification if an acceptable justification is not offered. “This is contrary to Regulation Z, which explicitly excludes CDFIs from the ATR requirements.” Business loans are the main staple of Park Community’s use of CDFI and LID funds, said Spradlin. “We have a micro-loan program for small or new businesses that provides up to $10,000, giving them access to loans they could not obtain elsewhere,” Park Community Credit Union in Kentucky received its CDFI certification five years ago and its LID in 2011. Founded in 1965, the credit union is grateful to have resources to handle data collection and the analysis required to document appropriate use of funds from the CDFI Fund and NCUA. “We know it’s a luxury to have a three-person analytics department that supports all areas of the organization,” said Jim Spradlin, CCUE, president and CEO of the credit union. “Our state has a lot of need, so access to grants that can be used to support members who might not qualify for traditional loans is important to our communities.” While Spradlin is taking a “wait-and-see” position on the proposed changes, he does point out that some changes related to loan volume and deposits in the target market might be a concern. “In most of our areas, our loan volume is high, but deposit levels are lower,” he said. “This is typical of CDFI areas where members need the most help because they don’t have significant savings.” His organization’s 5-year experience as a CDFI-certified credit union does provide confidence that they can adjust to maintain the certification, he added. “ Our state has a lot of need, so access to grants that can be used to support members who might not qualify for traditional loans is important to our communities. ” JIM SPRADLIN, CCUE, PRESIDENT AND CEO, PARK COMMUNITY CREDIT UNION
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