The Community Development Revolving Loan Fund (CDRLF) was able to fund just about half of the $7.6 million in total requests for technical assistance grants and loans from low-income-designated credit unions last year, according to a chairman’s message included in the fund’s recent report to Congress on 2020 activities.
In a statement accompanying the report, Todd Harper, chairman of the National Credit Union Administration (NCUA), urges Congress to increase its appropriations for CDRLF grants in 2022. (No specific amount for such increase is provided.)
Harper noted that the NCUA last year devoted nearly all its CDRLF efforts to help credit unions and their members meet the significant challenges posed by the COVID-19 pandemic. “Because demand regularly exceeds the amount of available funds for these grants, and because low-income credit unions are more likely to serve communities disproportionately impacted by COVID-19, I urge Congress to increase appropriations for CDRLF grants in 2022,” Harper stated. “With more funding, the agency could increase the number of credit unions receiving grants and increase the size of the grants it makes, deepening the program’s impact in underserved communities.”
Congress created the CDRLF to stimulate economic development in low-income communities served by credit unions; all appropriations go to eligible credit unions. The fund is administered by the NCUA.
The CDRLF’s annual report for calendar 2020 shows that the NCUA received 432 technical assistance grant and loan requests for a total of $7.6 million; the agency’s funding capacity allowed it to only award $3.7 million in technical assistance grants and loans to 165 credit unions. Technical assistance grants alone totaled $1.5 million and went to 153 eligible credit unions in 40 states and the District of Columbia, the agency showed in its report. Grant awards ranged from $900 to $10,000.
In addition to the above, the report states that the NCUA awarded 149 credit unions in 42 states and the District of Columbia more than $968,000 in urgent need grants.
CDRLF loans, as well as urgent need grants, are funded by the NCUA’s repurposing of principal payments on existing loans, which the agency says maximizes economic impact. Between 1979 and 2005, Congress provided annual funding at varying levels for CDRLF loans, totaling $13.4 million over that period. No further appropriations specifically for loans have been made since. The NCUA reported that as of Dec. 31, 2020, the CDRLF had a total of $6 million in outstanding loans to credit unions.
NCUA: CDRLF Funds Have Positive Impact on Communities, Credit Unions