CDFI expands capacity to provide credit, capital, and financial services to underserved populations and economically distressed communities

on "January 27, 2021 10:43 am"

The ongoing economic fallout caused by the COVID19 pandemic continues to impact individuals and businesses in our communities.  Now is the time to put action behind the credit union philosophy of people helping people and meet the financial needs of your members.

CDFI Certification is your gateway to the CDFI community, a network of mission-driven institutions that serve and empower economically distressed communities. This translates into real change for the communities and people who need it most. Apply for CDFI certification with these valuable resources for credit unions.

Inclusiv helps you navigate the CDFI application process
Inclusiv developed a methodology to obtain certification for credit unions based on a statistically valid random sampling of borrower's income data. Using this streamlined process, Inclusiv has assisted over one hundred credit unions with CDFI certification or re-certification.

NCUA opens streamlined CDFI application process
Federally insured, low-income credit unions seeking Community Development Financial Institution certification can apply to use the National Credit Union Administration’s streamlined qualification process beginning January 24.

CUNA Mutual Group, Inclusiv Launch CDFI Awareness and Certification Campaign
CUNA Mutual Group and Inclusiv have come together to facilitate credit unions’ access to the possible $12 billion for CDFIs and Minority Depository Institutions (MDI) contained in the COVID-19 stimulus package that Congress is presently debating. To this end, Inclusiv will provide expertise, technical assistance, advocacy and resources to CDFI-certified, CDFI-eligible and MDI-designated credit unions seeking to participate in these programs.

The Community Development Financial Institution (CDFI) Fund is available to credit unions and other financial institutions that provide financial services in low-income communities and to people who lack access to financing.

The CDFI fund has become the single most important source of external funding for credit unions. Since its inception 25 years ago, it has provided over $400 million in technical and financial assistance grants. CDFI credit unions consistently outperform their peers in growth, earnings, and services. In small widely disbursed investments, these credit unions manage more than $70 billion in combined assets across 46 states, leveraging $12 in private equity for every $1 of public investment capital.

CDFI Fund awardees, including those in Hawaii, have leveraged local resources many times over using matching funds and other investment from the private sector, philanthropy, and government.

There are currently 11 CDFIs in Hawaii, including five credit unions:

  • Hawaii Central Federal Credit Union, Honolulu ($312.2 million in assets, 17,824 members)
  • Hawaii Federal Credit Union, Honolulu ($99.1 million in assets, 13,225 members)
  • Hawaii First Federal Credit Union, Kamuela ($42.3 million in assets, 8,388 members)
  • Kauai Government Employees Federal Credit Union, Lihue ($125.8 million in assets, 7,226 members)
  • Molokai Community Federal Credit Union, Kaunakakai ($30.8 million in assets, 4,090 members)

Kauai Government Employees FCU recently received CDFI certification and plans to purse the earmarked funds next month. Prior to the CDFI certification, the credit union was an “Emerging CDFI,” minority depository institution credit union (MDI), and low income designated. These designations helped the credit union deploy $11 million of relief funds into Kauai and Hawaii since the pandemic hit. 

“We are developing a formidable set of tools to grow new businesses, re-circulating money locally to create a more diverse economy,” says KGEFCU CEO and president Monica Belz. “By growing a more equitable system of capital access, we ensure local talent can flourish and Kauai’s children can remain at home or return home to meaningful jobs.”

The CDFI approach represents a thriving model of public-private partnership where limited federal resources are used to attract private sector investment into low-income communities. This strategic relationship not only injects vital sources of new capital into economically underserved areas but ensures that important investment decisions are made locally by trusted organizations—like credit unions—that know their communities best.

“I highly encourage every Hawaii credit union to get in touch with Inclusiv and inquire about the process of becoming a CDFI,” Belz notes.

“Credit unions are best positioned to obtain CDFI and leverage it to help their community due to their MDI status and being in a hard-hit economic state. We owe it to our members and community to pursue our CDFI so that we can channel more stimulus funds into our communities.”

Nationally, hundreds of thousands of jobs and affordable housing units have been created by the CDFI Fund, millions of square feet of space have been developed or renovated for commercial and community service use and tens of thousands of small businesses have been financed.

 “The Credit Union DNA is deeply aligned with the CDFI mission which is especially relevant during this economic crisis,” Belz says.