On April 9, Treasury announced that the CDFI Fund will issue rules concerning the treatment of CDFI Fund awards under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). Treasury stated it will issue a forthcoming NPRM to clarify that certain benefits are “federal public benefits” within the meaning of PRWORA, which would make “illegal aliens and other non-qualified aliens” ineligible to receive these taxpayer-funded benefits. Treasury also announced reforms to ensure certified CDFIs comply with federal anti-discrimination laws.

A new provision will be added to relevant CDFI Fund agreements requiring that certified CDFIs do not engage in practices violating federal anti-discrimination laws, “including providing employment or financial preferences or set-asides based on race, ethnicity or sex in a manner inconsistent with federal laws.” Certified CDFIs will be required to adopt, implement and maintain compliance policies and procedures, certify annually as to their existence and administration, and make them available for review upon request by the CDFI Fund. In the event of noncompliance, the CDFI Fund will “vigorously exercise its remedies,” which may include decertification of CDFI status, termination of unused funds, and recapture of past awards.