Mary Scott Balys
On July 28, the CDFI Fund issued a request for comment regarding the criteria to designate a certified Community Development Financial Institution (CDFI) as a Minority Lending Institution (MLI).
In the Consolidated Appropriations Act, 2021 Congress created the MLI term and defined it as a CDFI that directs a majority of its financial products to Minority populations or communities; and either is a Minority Depository Institution (MDI) or demonstrates accountability to Minority populations. There is not currently any federal funding tied to an MLI designation, but the CDFI Fund is moving forward to define the term and plans to use it for limited purposes, such as data collection and reporting.
The CDFI Fund is seeking feedback on the criteria and process the CDFI Fund will use to designate a CDFI as an MLI and any additional information that would be beneficial in establishing policies and procedures related to MLI designation.
The notice in the Federal Register includes several specific areas, including:
- The definitions of minority and majority minority census tracts
- The time period that should be used to evaluate a CDFI’s track record of lending
- How to evaluate whether financial products are directed “at minorities or majority minority census tracts” including whether to consider the end user or beneficiaries
- How should the Fund evaluate accountability to minority populations and whether the makeup of advisory boards, loan committees, other nongoverning boards, or executive staff should be used to determine accountability
The deadline to submit comments is November 25, 2022.