Becoming a community development financial institution (CDFI) will be a little easier for credit unions in 2014.
NCUA plans to supply technical assistance awards—up to $2,500—to fund credit unions seeking CDFI certification.
The certification allows credit unions to seek grants from the CDFI Fund, which promotes economic revitalization in distressed communities throughout the country.
The National Federation of Community Development Credit Unions—the CDFI Intermediary for the credit union industry—advocated for the funding and applauds NCUA’s decision.
“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," says Federation President/CEO Cathie Mahon. “It is one of the building blocks for sustainable growth in low- and moderate-income communities.”
Most of the nation's 2,000 low-income credit unions are eligible for CDFI certification, although only 10% currently are certified.
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.
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.