The regulations implementing the Riegle Community Development and Regulatory Improvement Act of 1994, developed by the CDFI Fund, define the goal population as “…individuals or an identifiable group of people who…would not have adequate access to financial services.” In utter hypocrisy in October 2022, the CDFI itself called on all Americans with disabilities to qualify as goal populations. The CDFI fund was for individuals with disabilities accessing financial products from CDFI before they were against it.
Questions now arise as as to if the CDFI Fund’s decision violates the Americans with Disabilities Act (“ADA”), which was signed into law in 1990 and makes it illegal to discriminate against an individual on the premise of their disability. The ADA defines an individual with a disability as: “…a one that has a physical or mental impairment that significantly limits a number of major activities of life, a one that has a history of such an impairment, or a one that is perceived by others to have such an impairment.”
The CDFI Fund’s decision now puts CDFI prone to losing its certification in the event that they provide loans to disabled veterans or other disabled Americans. This is strictly what the ADA was adopted to forestall this from happening. For example, a CDFI that makes 60% of its loans to focus on market borrowers might be decertified if it makes one additional loan to individuals with disabilities, thereby reducing goal market lending to below 60%. By requiring CDFIs to issue 60% of their loans to borrowers designated by the CDFI Fund as goal market loans, CDFIs are forced to choose from serving individuals with disabilities (including disabled veterans) or maintaining CDFI certification. In fact, the CDFI is threatening to revoke the CDFI’s certification, following a call from the CDFI to extend access to capital for individuals with disabilities. The CDFI simply has to simply accept the research it publishes that clearly shows that folks with disabilities meet the statutory requirements to qualify as borrowers within the goal market.
When lending to disabled veterans, CDFI may fall below the minimum percentage of loans it must make to its goal markets. In fact, this shouldn’t be only a hypothetical problem. America’s largest non-bank CDFI lender, The Change Company (“Change”), is directly exposed to this risk. Change is keen about leveling the playing field for homeowners, serving blacks, Hispanics, low-income people and other borrowers, including disabled and disabled veterans. Because of Change’s passion for serving disabled veterans, the CDFI Fund forces Change to choose from lending to disabled veterans or losing their CDFI certification.
“It is a tragic day when individuals with disabilities are being denied access to programs designed for people who find themselves underserved by traditional bank lenders. It is obvious that folks with disabilities face financial discrimination and exclusion from private loans due to their disability,” said Reverend LB Tatum, pastor of Emmanuel Lutheran Church in North Hollywood, California, and a Navy veteran. a field for all Americans, including Americans with disabilities and American veterans who’ve been disabled in combat. The ongoing exclusion of individuals with disabilities from the CDFI program is inexcusable.”
