CDFI Credit Unions Empower Underserved Americans
Support the CDFI Fund
The National Federation of Community Development Credit Unions (Federation), whose mission is to promote the financial independence and well-being of working families and communities by expanding access to safe and responsible credit union products and services, presented CDFI Credit Unions: A Business Cases for Community Development Finance at the Governmental Affairs Conference (GAC) in Washington, DC last week. This is the sixth year the Federation has hosted a CDFI Roundtable at the GAC.
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Members of CoVantage CU, Royal CU, and the
Federation met with Wisconsin Congressman Sean Duffy last week
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The Federation represents Community Development Financial Institution (CDFI) credit unions that are helping low-income and other marginalized people join the economic mainstream. Among the Treasury Department's requirements to receive CDFI certification are that credit unions 1) direct at least 60% of their financing activities in low-wealth, low-income and other economically distressed target markets, and 2) build the capacity of their members to manage credit, build savings and enhance their financial security.
There are 286 CDFI credit unions in the US today, serving over 8 million members across 46 states with combined assets of more than $80 billion. CDFI credit unions are among the most effective channels of delivering investment to low- and moderate-income communities. CDFI credit unions have 871 branches in economically distressed CDFI Investment Areas and 195 branches in Persistent Poverty Counties where poverty rates have exceeded 20 percent of the population for the past 30 years. As of the end of 2016, CDFI credit unions had more than $69 billion in loans outstanding.
Credit unions are located in highly concentrated CDFI Target Markets. In addition to the CDFI certified credit unions in the "CDFI Zone," an additional 364 credit unions may be immediately eligible for certification.
The Federation was instrumental in establishing the CDFI Fund in 1994, is a CDFI intermediary, is a permanent member of the national CDFI Coalition, and is the advocate for CDFI credit unions to the Fund and the Treasury Department. The CDFI Fund has enjoyed bipartisan support throughout its history, distributing a total of $1.9 billion to CDFIs, including credit unions, community banks, loan funds and other financial institutions, since it was created.
It is critical that credit unions protect the CDFI Fund. CDFIs use Fund awards to generate billions of dollars in the form of loans to build homes, grow businesses, increase jobs and expand access to affordable healthcare and childcare. New data from the Fund shows that CDFIs generated $3.6 billion in loans and investments targeted to low-income people and communities in 2016 alone.
The FY 2017 House Financial Services Bill proposes $250 million for the Fund, the highest appropriation ever. The Senate bill provided $233.5 million, a freeze of the FY2016 rate. The Federation and the CDFI Coalition are supporting the House recommendation for FY2017 and FY2018. The House Appropriations Committee has launched the FY2018 appropriations process. The Committee has notified House Members that the due date for the Financial Services Bill is March 29th.
The CDFI Community is concerned that regardless of the Fund's success in targeting investment to vulnerable communities, President Trump's budget will eliminate the CDFI Fund.
The Federation is urging credit unions to engage with their Representatives to preserve the CDFI Fund. The CDFI Coalition has created Appropriations Request Templates, a form that most Representatives require from organizations making appropriations requests. Credit unions are also urged to sign the CDFI Appropriations Support Letter to Congress by March 20th.
CDFI Fund awards are investments, not charitable donations. Help support the largest dedicated source of funding for CDFIs. Please contact your Representative before March 20, 2017.
About the Federation
The National Federation of Community Development Credit Unions is a certified CDFI Intermediary representing community development credit unions (CDCUs). The Federation's member CDCUs provide credit, savings, transaction services and financial education to over 6 million residents of low-income urban, rural and reservation-based communities across the US, and hold over $60 billion in community-controlled assets. Founded in 1974, the Federation is headquartered in Lower Manhattan with offices in Madison, WI. The Federation offers a wide range of advocacy, educational, training, investment, marketing, and outreach programs to support and assist CDCUs. For more information about the Federation and its programs, please visit www.inclusiv.org.