Northwest CU Association: Introducing CDFI Certification at Right Time and Place

Northwest CU Association: Introducing CDFI Certification at Right Time and Place

Prior to serving as President and CEO of the Northwest Credit Union Association, Troy Stang built his professional background in credit unions, leagues, and in public policy as a White House appointee in the U.S. Treasury. At NWCUA, Troy provides an expert and nuanced perspective to his approach with credit unions and CDFIs, as the CDFI Fund was a part of his portfolio at Treasury.

The credit unions where Troy worked focused on serving a select group of people—parishioners, city and state employees—before expanding memberships to address the financial needs of the community at large. As Troy explains, “When I was with the faith-based credit union, 98% of parishioners were members. We could serve them and anticipate their next needs. But, when a credit union opens up to the entire community, there’s a sense of, ‘Where to start?’ How would a credit union communicate to a new group and assess the products they might need without the intimate knowledge of their behaviors?”

Troy brought this lens to the CDFI Fund, where certification as a CDFI presented a set of tools and resources that advanced credit unions’ community development work. However, he also understood that there should be consideration for a credit union’s own culture and strategic journey even before one starts a conversation on the benefits from a CDFI certification.

That consideration is at the foundation of the Northwest Credit Union Association’s work with its member credit unions. The Association supports its members in obtaining funding and certifications, as well as with consulting advice. At the right time and place, the Association introduces a conversation about CDFI benefits as part of a credit union’s approach to growth. A credit union has to not only understand the opportunities that being a CDFI might hold but also decide that it makes sense for its future services and success.

Troy explains, “In our region, we see a lot of credit unions interested in CDFI certification. However, if a credit union thinks of CDFI certification when a new round of funding becomes available, it can already be too late. That thought has to be embedded in the institution’s growth strategy, especially if that particular credit union has pivoted from its original roots of perhaps serving a smaller group, to focusing on financial access for a larger, community membership.”

There also can be a lack of knowledge between how CDFIs and credit unions can collaborate, which a league or an association can make clear and accessible. During the pandemic, the U.S. Congress approved a series of stimulus packages, including the CARES Act, which provided support funds to states. While some stakeholders at the state level knew what a CDFI was, they did not know that credit unions also could be CDFIs.

“There was a lightbulb that came on,” Troy states. “At the Association, we have member-owned cooperatives that knew best what the needs were, in communities hardest impacted by the pandemic. Why not let CDFIs be distributors of grant dollars, for example, as small business grants or emergency loans? We could connect these funds directly to people who need them the most.”

Community credit unions should not overlook CDFI opportunities; they should examine the market and their potential field of membership and align with opportunities that would benefit them. Leagues and associations can play a key role in helping credit unions by understanding the scope and complexity of their credit union members’ work and introducing them to new products and services.

The NWCUA and Inclusiv, the CDFI expert in the credit union industry, can jointly encourage conversations that address issues and offers solutions by providing thought leadership and sharing ways for credit unions to tap into resources.

As CDFIs and the credit union industry evolve, there is more opportunity to use these funds and mission-driven financial institutions to address challenges to financial inclusion and financial equity.

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