(January 21, 2009 – New York, NY) The economic environment in 2008 proved to be challenging for communities across the nation, especially those in areas hard-hit by the foreclosure crisis. Despite these adverse times, the National Federation of Community Development Credit Unions (Federation) had an exceptionally strong year, breaking records raising and renewing capital, and more importantly, increasing its investments in community development credit unions (CDCUs) and purchasing affordable mortgages to free up loan capital in distressed markets.
As a federally certified Community Development Financial Institution (CDFI) Intermediary, the Federation has been a leader and an innovator in the CDFI industry, raising millions in funds to support the growth and expansion of CDCUs across the United States, credit unions with a primary mission of providing sustainable and affordable financial services to low-income and underserved communities. 2008 was no exception, and the Community Development Investment Program closed the year with more than $46.2 million in assets under management (including commitments) and a 24% growth in its investment portfolios, now totaling over $36.2 million in investments outstanding and committed to CDCUs.
In spite of the rapid growth and the current economic climate, the Federation’s investments have proven to be sustainable; and all investments in the Federation’s portfolio continue to perform.
Inside the Community Development Investment Program
The Community Development Investment Program celebrated its 25th anniversary in 2007 by launching a capital campaign to raise $25 million within three years. The additional capital is allowing the Federation to increase its investments in CDCUs, and since announcing its goal, the Community Development Investment Program has successfully raised more than $19 million in additional capital.
2008 Campaign Highlights: By the Numbers
- Total assets under management (including commitments) rose 27.2%, from $36.3 million to $46.2 million.
- $9.6 million in additional capital was raised from eight investors, four of them new to the Federation (Annie E. Casey Foundation, Deutsche Bank, Unitarian Universalist Congregation of Shelter Rock, and United Nations Federal Credit Union).
- Total Federation investments outstanding and committed to CDCUs grew by 24% to $36.2 million.
- A Record $17.8 million invested in CDCUs in 2008 including:
- $7.8 million in new investments
- $5.3 million in renewed investments
- 43 mortgages totaling $4.7 million purchased, increasing mortgage portfolio to $6.1 million.
- Fully disbursed the Federation’s Community Development Relief and Rebuilding (“Hurricanes Katrina and Rita”) Fund, a total of $926,000, which provided supplemental grants to CDCUs in the Gulf Regions, including ASI FCU, Coastal Waters FCU, Hope Community CU, Total Community Action FCU, and University of New Orleans FCU.
With a recent commitment from HSBC Bank to invest an additional $700,000 in CDCUs through the Community Development Investment Program, the Federation looks forward to continuing its partnerships with its current investors and establishing new relationships to increase investments in CDCUs, supporting their efforts in building sustainable communities. Although no one is immune to the economic environment, CDCUs have continued to demonstrate their expertise and dedication to serving the underserved. As of the third quarter of 2008, CDCUs increased loans to their members by over 7%.
Although challenges continue in 2009, the Community Development Investment Program is poised to take advantage of new opportunities by working with other investors to support CDCUs serving low- and moderate-income communities across the nation.
To learn more about the Federation’s Community Development Investment Program, please click here.
Social investors considering an investment in CDCUs through the Federation should contact Community Development Investments Director Alice Greenwald at firstname.lastname@example.org, or (800) 437-8711 x212.
The Federation is proud of the diversity of its investors, which include faith-based institutions, banks, foundations, government agencies, and credit unions. Since inception, no investor in the Federation’s Community Development Investment Program has ever realized a loss to their investment. A complete list of the Federation’s investors is available by clicking here.
© 2009 National Federation of Community Development Credit Unions.