The Community Development Financial Institutions (CDFI) Fund recently published a Frequently Asked Questions (FAQs) document concerning the CDFI certification cure period that is currently in place. Along with the FAQs, the CDFI Fund published certification-related cure period worksheets.
The CDFI Fund previously announced a six-month blackout period beginning October 1, 2022, to prepare for a revised CDFI certification application and reporting requirements. During the blackout period, CDFIs must maintain their certification status in good standing.
CDFIs and Cure Periods for CDFI Certification
CDFIs in a cure period concerning their CDFI certification have failed to demonstrate that they meet one or more CDFI certification requirements. Therefore, they must take action to correct the deficiency or deficiencies that have placed them in the cure period.
The CDFI Fund recently sent general cure notifications to all CDFIs with similar deficiencies. Those notifications specify the issue or issues the CDFI must address and the deadlines for addressing and resolving those issues.
CDFI’s FAQs advise CDFIs in a cure period on how to resolve certification-related deficiencies generally. These CDFIs must submit certain documents concerning their cure requirements by the relevant deadlines. Failing to follow these CDFI Fund directives could result in losing their certifications.
Highlights of the CDFI Cure Period FAQs
The FAQs include general information about how CDFIs can determine what deficiencies they have, how to resolve them, and how long they have to resolve them, including how to:
- Identify the specific compliance issues that require resolution during the cure period;
- Obtain additional clarification about outstanding compliance issues;
- Resolve CDFI certification cure-related issues concerning:
- Legal Entity
- Financing Entity
- Target Market or
- Accountability
- Handle previously submitted Target Market modification requests
- Submit a CDFI Target Market modification request, including:
- How to identify the Target Market for the CDFI Target Market modification request
- How to decide what Target Market components to include in the overall Target Market, including Investment Areas, Low-Income Targeted Populations (LITPs), Other Targeted Populations (OTPs), and Other-Other Targeted Populations (Other OTPs)
- Identify acceptable and unacceptable assessment methodologies to determine if a CDFI’s activity has been Target Market-directed for CDFI Certification purposes
- Create Target Market maps in CIMS to represent an overall CDFI Certification Target Market
- Set up Target Market records in AMIS for Target Market modifications
- Define the current fiscal year to date
- Determine the means of accountability to meet the CDFI Certification Accountability requirement
- Assess accountability for CDFI Certification purposes
- Demonstrate a board member’s accountability
- Define a board member’s conflict of interest for CDFI Certification Accountability purposes
- Know when to expect the final determination by CDFI of submitted cure-related information
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Dionne Savage is here to help you access the benefits of economic development tools such as New Markets Tax Credits, Low-Income Housing Tax Credits, C-PACE, and Historic Tax Credits. These programs can give you the resources to revitalize and build up communities across the United States. With our legal advice and your ideas, we can work to achieve your dreams for your community.