The Critical Role of the ACR: What CDFIs Need to Know

The Critical Role of the ACR: What CDFIs Need to Know

Shannon McKay

Thursday, April 3, 2025

Community Development Financial Institutions (CDFIs) play an essential role in fostering economic growth and supporting development in communities underserved by traditional financial institutions. To maintain their status as a certified CDFI, and continue delivering on their mission, CDFIs must submit the Annual Certification and Data Collection Report (ACR) on an annual basis. Here is why the ACR is so crucial and what could happen if it is not submitted on time and completed accurately.

Why the ACR Matters

The ACR is not just a regulatory and statutory requirement. It is a tool that ensures CDFIs remain accountable to the communities they serve. Submitted annually within 90 days of the end of a CDFI's fiscal year (or 180 days under the revised ACR submission guidelines), the ACR allows the Community Development Financial Institutions Fund (CDFI Fund) to:

• Assess compliance by verifying CDFIs continue to meet the CDFI Certification criteria, including their dedication to serving targeted markets and adhering to responsible financing practices;
• Collect critical data and gain insights into the state of the CDFI industry and ensure Certified organizations maintain their focus on community development; and
• Protect the integrity of the Certification process by confirming organizations remain mission-driven and meet the rigorous standards expected of CDFIs.

The Risks of Non-Submission or Noncompliance

Failing to submit the ACR-or submitting an inaccurate or incomplete report-can have serious consequences, including:

• Loss of CDFI Certification. Certified CDFIs that fail to meet the CDFI Certification requirements outlined in their ACR could lose their certification status. For instance, if an organization does not meet the Target Market activity thresholds or fails to adhere to responsible financing practices, its certification may not be renewed;
• Program ineligibility. CDFI Certification loss can disqualify organizations from accessing CDFI Fund programs and resources, which are critical for fulfilling their mission;
• Award Noncompliance. Certified CDFIs who have active CDFI Program award(s) and fail to maintain their CDFI Certification status are considered noncompliant with their awards; and
• Reputational risk. Noncompliance could harm an organization's reputation within the industry and among the communities it serves.

The New ACR: What's Changed?

The ACR process has undergone significant updates to align with the revised CDFI Certification Application, released in December 2023. Key changes include:

• Extended Deadline. Organizations Certified under the revised Certification Application have 180 days from the end of their fiscal year to submit the updated ACR. The deadlines are outlined in the new CDFI Certification Agreement;
• Enhanced data collection. The revised ACR has three new sections on Sources of Investment Capital, Contributed Operating Revenue, and Loans and Leases. There are also new data points reflecting questions from the revised Certification Application along with data points being auto-populated by information provided in the accompanying Transaction Level Report (TLR) submission; and
• Consistent standards. Newly Certified CDFIs as well as those being recertified under the revised CDFI Certification Application are now evaluated under the same rigorous criteria.

Staying Compliant

Until recertified under the revised CDFI Certification Application, any currently Certified CDFI whose existing CDFI Certification date is before October 1, 2023, must continue submitting the ACR within the existing 90-day deadline. Regardless of the timeline, the ACR remains mandatory for all CDFIs unless otherwise notified by the CDFI Fund. Failure to complete and submit the report could lead to loss of CDFI Certification and further penalties, especially for those receiving program funds or with active CDFI Program award(s).

The ACR is more than just a form. It is a cornerstone of the CDFI Certification process. By submitting a timely and accurate report, organizations demonstrate their commitment and accountability towards achieving their community development mission.

For more details about the updated ACR and TLR requirements, refer to the official guidance materials provided by the CDFI Fund, which are located on the CDFI Certification section of the CDFI Fund's website under Step 3: Reporting. The CDFI Fund also holds quarterly webinars on the ACR submission process, information on these webinars can also be found here. Additionally, guidance information regarding the revised CDFI Certification Application can be found here.

Ensure your organization remains CDFI Certified and ready to make a lasting impact in the communities you serve.

Shannon McKay is the Program Manager for the Office of Financial Strategies and Research

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