CDFI Fund Awards Over $17.8 Million to CDCU Movement
(August 9, 2012- New York, NY)
Low- and moderate-income communities across the nation are about to receive a boost to their local economies thanks to awards totaling nearly $163.7 million from the U.S. Treasury Department Community Development Financial Institutions (CDFI) Fund. Earlier this week CDFI Fund Director Donna J. Gambrell joined Treasury Deputy Assistant Secretary Don Graves and Rep. Gwen Moore to announce 210 awards, including 24 awards to community development credit unions (CDCUs) and credit union organizations totaling more than $17.8 million.
Credit union awards represented 12% of the total CDFI Fund grants under this round, and 83% of the credit unions receiving awards are members of the National Federation of Community Development Credit Unions (Federation). The Federation also received a grant of more than $1.4 million.
Sandra Lumbley, CEO of Kerr County Federal Credit Union in Kerrville, Texas, which received nearly $1.1 million, said the announcement is significant.
“Our credit union is dedicated to serving the underserved,” Lumbley said, “and this grant will be put to great use in our community.” The grant will be used to increase specialized lending that helps low-income borrowers to break free from predatory lenders. “We serve many members that traditional financial institutions can’t or won’t,” Lumbley added. “Our loans help people who believe that high interest payday and title loans aretheir only option.”
Federation Interim President/CEO Pamela Owens said the CDFI Fund grant is just part of the story. “A recent study released by the CDFI Fund shows that CDCUs mobilize $10 in community assets for every dollar of capital, which is more than any other type of CDFI,” Owens said. “We’ve known this for a long time, but were pleased to see the power of cooperative finance recognized by the CDFI study.”
Communicating Arts Credit Union in Detroit, Michigan was given a grant in the amount of $953,806. CEO Hank Hubbard noted that the Detroit community has benefitted greatly from the CDFI Fund in the past. “These grants allow us to reach out further into the impoverished areas of Detroit that other legitimate lenders cannot or will not go,” Hubbard said. Communicating Arts also received a CDFI grant in 2011. “The 2011 funds allowed us to refinance predatory car loans for approximately 100 people, saving them an average of $80 per month,” Hubbard said. “That’s a total savings for the group of over $400,000 through the life of the loans.” And the benefits continue to grow. “As the members pay the loans back – we can lend it out again,” he added.
“The Federation has fought long and hard to ensure that CDCUs continue to receive their fair share of CDFI awards,” explained Owens. “Today we’ve seen a more equitable distribution with some of the awards going to credit unions that are new to the Fund,” she said. “These awards will bring major impact to the communities served by CDCUs and CDFIs generally.
CDFI Fund Awards (FA & TA) to CDCUs FY2012
ASI Federal Credit Union $1,453,806
Bethex Federal Credit Union $95,500
Bridgeway Federal Credit Union $99,999
Brooklyn Cooperative Federal Credit Union $964,806
Caddo Parish Teachers Federal Credit Union $100,000
Citizens Community Credit Union $1,453,806
Communicating Arts Credit Union $953,806
Coshocton Federal Credit Union $151,000
Guadalupe Credit Union $253,806
JetStream Federal Credit Union $92,500
Kerr County Federal Credit Union $1,084,187
Kingsville Community Federal Credit Union $483,806
Latino Community Credit Union $1,453,806
Lower East Side People’s Federal Credit Union $494,806
Molokai Community Federal Credit Union $375,900
NATCO Credit Union $313,606
Neighborhood Trust Federal Credit Union $550,000
Opportunities Credit Union $1,453,806
Pacoima Development Federal Credit Union $91,000
Prince Kuhio Federal Credit Union $363,800
Self-Help Federal Credit Union $1,453,806
Shreveport Federal Credit Union $1,253,806
Syracuse Cooperative Federal Credit Union $100,000
TULIP Credit Union $100,000
Total CU Awards (24) $15,191,358
Awards to Credit Union Organizations
National Federation of CDCUs $1,453,806
The Support Center $953,806
Bois ForteBand of Minnesota Chippewa $74,008
Lakota FCU Steering Committee $147,253
Total CU Organizations (4) $2,628,873
Total CDCU & CU Organization CDFI Awards (28) $17,820,231
The Federation is committed to helping credit unions gain access to the resources they need to better serve low-income consumers and underserved communities. The Federation was instrumental in the campaign that established the CDFI Fund, and credit unions have received more than $135 million in awards since its inception. “These awards have had a strong, positive impact on the credit unions and the communities they serve,” Owens said, “because CDCUs have used this capital to mobilize more than $1 billion in impact.”
“The Federation is the only credit union organization that specializes in providing services to credit unions which serve low- to moderate-income communities and meets periodically with the leadership of the CDFI Fund to ensure it remains responsive to the needs of credit unions,” said Pablo DeFilippi, Director of Membership. The vast majority of CDFI certified CUs are Federation members, and as a result, “we are the primary advocates for community finance and community development issues, and a significant part of our efforts focus on the CDFIFund, which continues to be a key component of this administration’s community revitalization strategy,” he said.
Applying for CDFI Financial or Technical Assistance is a highly competitive process, but the benefits are worth the effort, said DeFilippi. “The CDFI Fund still represents the largestsource of external capital available for community development financing,” he said. “Investing time and expertise in putting together a solid business plan and writing a competitive application represents a worthwhile investment that will pay off many times over.”
Owens agreed: “We hope many more credit unions will submit applications the next round.”
The Federation supports the efforts of all credit union applicants through advocacy and specialized training programs. In addition, the Federation offers individual assistance to credit unions through its CU Breakthrough Consulting Services. “We’re happy to see that six credit unions that we helped with CDFI certification or grant applications received awards in this round,” said DeFilippi.
© 2012 National Federation of Community Development Credit Unions.