ONTARIO, Calif. (12/17/15)--The California and Nevada Credit Union Leagues last week hosted two separate events aimed at educating credit unions on how to become certified community development financial institutions (CDFIs).
Experts from the National Federation of Community Development Credit Unions facilitated the sessions in Oakland and Ontario, Calif.
Financial institutions with CDFI status can be awarded federal funds to serve specific target markets. The CDFI certification is a ticket to access external resources and formalize strategic partnerships with public and private entities operating in economically distressed communities.
"It's a valuable credential that sets a credit union apart in the market place," said Pablo DeFilippi, vice president of membership and business development for the federation. "In addition to potential grant funding, it can be used for community awareness purposes, and to obtain certain regulatory flexibility."
The event was another touchpoint brought about by a recent partnership between the leagues and the federation, which came together in early November to promote how credit unions can serve locally underserved Hispanic immigrants through the Juntos Avanzamos initiative. (See related story: 1st 2 CUs in N.M. receive Juntos Avanzamos designation)
“CDFI certification is one of the building blocks of community finance,” said Terry Ratigan, senior consultant for the federation. “A grant from the CDFI Fund is essentially equity. It’s net worth that your credit union can leverage for more loans. So far, credit unions are leveraging more private capital than any other type of CDFI.”
DeFilippi told attendees that many credit unions are already operating like CDFI institutions and don’t realize it. They can become certified with the federation’s assistance, although networking with local organizations is also important.
“We’re not asking you to build anything new,” he said. “We’re asking you to build upon your foundation to get to a new level. And to do this, you have to work in partnership with others in your community.”