Treasury Fund Proposes to End Race-Based Target Markets

Treasury's CDFI Fund proposed to bar certified community development financial institutions ("CDFIs") from qualifying through target markets defined by race or ethnicity. The proposal revises the CDFI Certification Application and applies to applicants and currently certified CDFIs.

The "Other Targeted Population" categories for African American, Hispanic, Other Pacific Islander, Filipino and Vietnamese borrowers would no longer qualify, and no new race- or ethnicity-based target market type would be allowed. Certified CDFIs relying on one of the five categories would have one year to qualify under another category.

The CDFI Fund also proposed dropping the requirement that a CDFI show accountability to each part of its market through board representation. Accountability would instead be measured through target market activity. In Question 10, it asked what minimum activity threshold should apply to each target market type when an entity serves more than one.

The notice would delete the board and executive staff demographic questions, except total headcounts. It would add questions on applicants' and affiliates' past administrative proceedings and compliance in other federal award programs.