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1B TARP plan includes CDFI CUs
WASHINGTON (2/4/10)--The U.S. Department of the Treasury on Wednesday announced that it will set aside up to $1 billion in Troubled Asset Relief Program (TARP) funds for use by Community Development Financial Institution (CDFI) credit unions and other financial institutions. Under the Treasury plan, credit unions would be able to borrow as much as 3.5% of their total assets over an eight-year period. Commenting on the announcement, Credit Union National Association (CUNA) President/CEO Dan Mica said that while CUNA appreciates the Treasury’s announcement, CUNA “continues to contend that the most effective way to help many more credit unions help the economy is by giving credit unions greater capacity to make business loans.” “Doing so – through legislation raising the amount of loans credit unions can make in business loans to 25 percent of total assets – would inject more than $10 billion into the economy and create 108,000 new jobs in the first year. There is no public policy reason to deny credit unions this, while at the same time giving banks – who are not lending -- $30 billion as an enticement to do what credit unions are already doing, and are willing to do more of,” he added. National Federation of Community Development Credit Unions President/CEO Clifford Rosenthal met with Treasury Secretary Tim Geithner just prior to the announcement, and was among those in attendance during the announcement. The program will not require legislative approval and is not connected to the Obama administration’s proposal to channel billions to community banks to support small business lending. The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. The Treasury last year announced a total of $113 million in funding would be made available through the CDFI Fund during 2010, and under National Credit Union Administration regulations, credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding that will help maintain their credit union's presence in the community.


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