Do you know any REAL Solutions credit unions that have delayed confirming their eligibility for NCUA low-income designation or CFDI certification?
Secretary of the Treasury Timothy Geithner announced the Community Development Capital Initiative (CDCI), and our expectation is that it will make hundreds of millions of dollars available to qualifying credit unions.
This is a rare and valuable opportunity for credit unions serving low-income communities, of which there are more than 1,000 in the United States. Only about 150 are now certified as CDFIs, and hundreds more would qualify . But it will take some quick action.
Background & Key Features
Since mid-2009, the Federation has been working with the Treasury Department and NCUA to develop a special, one-time program to invest in credit unions serving America’s hardest-hit communities.
The key features of the program are as follows:
- The CDCI will invest up to 3.5% of a credit union’s assets.
- The investment will be in the form of secondary capital loans, which count as net worth for regulatory purposes.
- The overall term is 13 years.
- The rate is 2% for the first 8 years, and 9% thereafter, in order to encourage participants to repay the loan early.
- To participate, a credit union must be:
- Low-income designated by NCUA or its state regulator
- Certified by the Community Development Financial Institutions (CDFI) fund as a CDFI
- NCUA will have to certify that a credit union is viable, in order for it to accept funds.
- The application deadlines are as follows:
- April 2 to apply for the program
- April 16 to secure CDFI Fund designation, if you don’t already have it.
Making these programs work for credit unions will be the Federation’s top priority in the weeks and months to come. We have worked, and continue to work, with Treasury and NCUA every step of the way in order to develop a CDCI program that helps our industry.
We’ve committed much of our staff to working on the CDCI in the weeks and months ahead. We will be offering intensive technical assistance to Federation members and consulting services to other credit unions, on CDFI certification, eligibility, NCUA and Treasury requirements, and more.
How do I act on this?
To act on this or ask questions please leave a comment, visit the Federation’s web site (www.cdcu.coop), or contact Pablo DeFilippi, Director of Member Services, (Pablo@cdcu.coop , 800-437-8711, ext. 304).
OR view, download, fill out, and submit the appropriate forms below: