CDFI Fund grows economies, supports underserved communities
The Treasury’s Community Development Financial Institutions (CDFI) Fund is being used to grow local economies and serve communities in need, CUNA wrote to the House Appropriations subcommittee on financial services and general government this week.
The fund makes capital grants, equity investments and awards for technical assistance to certified CDFIs. As of Nov. 30, there are 285 credit unions out of 1,066 certified CDFIs nationwide.
“CDFIs such as some Community Development Credit Unions (CDCUs) are charged with supplying low-income, distressed communities with traditional banking services such as savings accounts and personal loans, and offering individuals the tools needed to become self-sufficient stakeholders in their own future. The CDFI Fund uses small amounts of federal dollars to leverage significant amounts of private and non-federal dollars, and has added a tremendous boost to the CDFI industry (which relies heavily upon private sector funds from corporations, individuals, religious institutions, and private foundations).”
CUNA’s letter notes two specific examples:
- Appalachian Community FCU, Johnson City, Tenn., secured a $2.1 million CDFI grant two years ago to provide assist over 200 families in its community $10,500 down payments assistance loans. This grant was leveraged to enhance homeownership, thus providing a broader tax base as well as providing work for the construction sector and local businesses that provide services to that sector; and
- St. Louis Community CU, St. Louis, Mo., received a financial assistance grant from the CDFI Fund in 2013 to help launch a program to provide affordable car loans to low- and moderate-income individuals and families. This $849,000 grant was leveraged into over $22 million in auto loans.
“These examples represent just two credit unions and how the CDFI Fund is being used to grow local economies and serve the most economically distressed communities in the nation. Fully funding the CDFI Fund is a strong investment by the federal government,” reads CUNA’s letter.
The Treasury’s CDFI Fund levels were set at $250 million for fiscal year 2019 in the budget deal signed by President Donald Trump earlier this month. CUNA successfully fought for previous years’ funding when the CDFI Fund was zeroed out in early budget materials.