NEW YORK (12/4/13)--The National Federation of Community Development Credit Unions, in its campaign to increase the number of low-income credit unions certified as community development financial institutions (CDFIs), said the idea is getting more support from throughout the credit union industry, including from regulators.
The federation applauded a recent decision by the National Credit Union Administration to offer technical assistance awards for credit unions that seek a CDFI certification. The agency has made grants of up to $2,500 per credit union available.
Several leagues have committed to educate, inform and support their member credit unions seeking the certification, said the federation, citing the Mississippi Credit Union Association as an example.
MSCUA has committed to kick off a year-long initiative with the federation aimed at helping credit unions in the state understand the value of CDFI certification to their communities.
"In Mississippi, we have 84 credit unions and 75% qualify for low-income designation," said MSCUA President/CEO Charles Elliott. "They represent 86% of all members, 89% of total assets and one of the highest percentages of people living in poverty," he said.
"We support the federation's mission of helping people achieve financial independence through credit unions and will be working with the federation on increasing the number of CDFI-certified credit unions in our state," Elliott said.
Credit unions comprise less than 25% of all CDFIs. As the CDFI intermediary for community development credit unions, the federation has advocated for an increase in the number of CDFI-certified credit unions. Most of the nation's 2,000 low-income credit unions are eligible. However, roughly 10% are CDFI-certified, the federation said.
"CDFI certification is one of the building blocks for sustainable growth in low- and moderate-income communities," said Cathie Mahon, federation president/CEO. "The CDFI Fund is one of the most important sources of capital community development credit unions can access to scale the delivery of safe, affordable financial products and services in their communities."
Certification is provided by the U.S. Treasury Department's CDFI Fund, which has awarded $1.5 billion in capital grants since its inception in 1994. To be eligible, credit unions must have a primary mission of promoting community development and must direct a minimum of 60% of their financing activities to an eligible target market, including an investment area or low-income population.
For more information, contact the federation or its consulting arm, CU Breakthrough.