Question PM28 asks Applicants to describe the activities of any Affiliate subject to the Primary Mission test (i.e., a covered Affiliate, as described in Question 14) and how the Affiliate’s mission and activities support and/or are consistent with the community development mission of the Applicant.

An Affiliate mission that supports or is consistent with that of the Applicant’s would be one that may broadly benefit a community even if it is not specifically focused on community development. For example, a parent entity (i.e., the Controlling Affiliate) that has a mission related to environmental protection or sustainability may be considered consistent with a mission of community development, especially if the Applicant offers climate-related financing to a Target Market.

If the Applicant does not have a board-approved strategic plan, it must submit a board- or owner-approved narrative that describes the community development outcomes that the Applicant believes will result from the provision of its Financial Products and Financial Services, and how those Financial Products and Financial Services lead to those outcomes.

As evidence of a community development strategy, the Applicant’s strategic plan or narrative should include references to:

To meet the CDFI Certification standards for responsible financing practices, an Applicant (and its Affiliates) should provide Financial Products and Financial Services that are consistent with promoting community development. Such Financial Products should not harm consumers, be affordable and originated based upon an assessment of whether a borrower is able to repay a loan and have terms and conditions that are transparent and understandable to the borrower. CDFIs should practice transparency, fair collections, and be in compliance with federal, state, and local laws and regulations.

The Application includes a series of questions related to an Applicant’s (and its covered Affiliates’) Financial Products and Financial Services to determine whether they are consistent with a set of community development principles and the standards for responsible financing practices established by the CDFI Fund for the purposes of CDFI Certification. These questions apply to all Financial Products and Financial Services offered by an Applicant and its Affiliates, not just those directed to one or more of the Applicant’s Target Markets.

No, CDFIs are not required to use the ability to repay standards and metrics established by the CFPB to demonstrate they have underwritten a consumer, mortgage, and/or small business loan to ensure the borrower has the ability to pay back that loan.

For Question PM14, an Applicant that does not include an assessment of a borrower’s ability to pay back a loan as part of its underwriting standards for each of its covered mortgage, consumer, and/or small business loan products may offer an explanation of how this practice serves a community development purpose. In addition to the community development purpose of the relevant loan product, examples of the types of information the Applicant could provide to support such an explanation include, but are not limited to:

Question PM14 asks whether the underwriting standards for the Applicant’s covered mortgage loan products (as well as for its consumer and/or small business loan products) include an assessment of the borrower’s ability to pay back the loan. For purposes of this question PM14, a covered mortgage loan product is limited to a consumer credit transaction that is secured by a lien (including subordinate liens) on a single-family, owner-occupied residence other than:

No, for purposes of Certification the CDFI Fund does not require that an Applicant calculate, disclose, or report the MAPR of each of its consumer loan products, unless otherwise required by statute or regulation to do so. Applicants only must attest as to whether any of its consumer loan products “allow for” a MAPR in excess of 36%.

Yes. If any of the consumer loan products (including credit cards and purchased loans) of the Applicant or its Affiliates allow for a MAPR in excess of 36%, each of the following standards must be met as well: