The Center for Responsible Lending, Self-Help Credit Union, Self-Help Federal Credit Union, and Self-Help Ventures Fund welcome the CDFI Fund’s efforts to more vigorously ensure that the primary mission of any CDFI is to promote community development. To that end, we urge the Fund to establish lending standards that function as clear, bright-line eligibility requirements for CDFI certification or renewal:
- A fee-inclusive annual percentage rate (APR) limit of 36%, computed consistent with the current Military Lending Act regulations (or lower if required by state law);1 and
- For any mortgages offered, product protections consistent with the qualified mortgage (QM) statutory protections: (a) no negative amortization, interest-only payments, or balloon payments; (b) adjustable rate mortgages underwritten at the maximum rate in the first five years; (c) original maximum term of 30 years; and 4) total points and fees generally not exceeding three percent of the loan amount. These product protections will help ensure responsible mortgage lending while allowing innovation in underwriting that may benefit communities that CDFIs serve.