Community Development Financial Institutions (let’s call them CDFIs) were created to provide financial services like checking, savings, and loans to people who might otherwise go overlooked.
The US Department of the Treasury houses The Community Development Financial Institutions Fund which provides grants and other forms of support to CDFIs. Nationwide, over 1000 CDFIs – including credit unions – serve economically distressed communities by providing credit, capital and other services often unavailable from mainstream financial institutions.
Today in a conversation-thread, our Field Coach Bill Meyers pointed out this opportunity for credit unions looking to step into the community development space:
There is a big change in the wind. This is the golden era for the Community Development Financial Institutions Fund.
CDFI Fund is removing the requirement for matches for 2009 CDFI applications. This is BIG. This year’s CDFI allocation is $107MM, the largest in a decade. But wait, the Stimulus added $100MM. Plus Obama’s next budget proposes $214MM. There’s more! NMTC has an allocation of $5B, applications due by April 8. BEA is up to $22 MM. For 2010, the Capital Magnet Fund uses FNMA and Freddie $ for affordable housing. The Housing and Economic Recovery Act is another rich pool. SBA has funding for renewable energy express loans.
Bill went on to ask a question that doubles as a call to action for many credit unions:
I’ve heard estimates that there are 1000 Credit Unions that could be certified as CDFIs (but only about 200 currently certified). Do you think it’s worthwhile pushing a CDFI certification?
Since its creation, the CDFI Fund has awarded almost $900 million in grants and tax credits to community development organizations and financial institutions.
Although there is a rigorous application process, credit unions and leagues can tap into the CDFI fund to support REAL Solutions program efforts.
To learn more visit http://www.cdfifund.gov/.
PS: Next week we’ll be featuring a podcast with Bill Meyers discussing his Steer Clear Report (download the PDF here) on how credit unions can help car buyers avoid predatory loans.