(October 3, 2009 – Milwaukee, WI)  Donna Gambrell, Director of the Treasury Department’s Community Development Financial Institutions (CDFI) Fund, today announced the recipients of the FY2009 CDFI Financial Assistance (FA) awards at a ceremony in Milwaukee, Wisconsin.  Democratic Congresswoman Gwen Moore was also on hand for the event.  Moore represents Wisconsin’s Fourth Congressional District, which includes the entire city of Milwaukee and most of its working-class suburbs.

Of the 62 CDFIs receiving awards, just two awards totalling $850,000 went to community development credit unions (CDCUs), less than 2% of total FA awards this round.  The CDCU awards were $350,000 to Neighborhood Trust FCU (New York, NY) and $500,000 to Union Settlement FCU (New York, NY).  The Fund also awarded $750,000 to the National Federation of Community Development Credit Unions (Federation).  Combined, these three awards account for 3.04% of the total $52.7 million that was awarded.

“We are pleased to have received an award this round,” said Federation President/CEO Cliff Rosenthal.  “As a certified CDFI Intermediary, these funds will support the expansion of dozens of CDCUs across the nation.”

Despite the Federation’s award, Rosenthal voiced concern about the small share of grants directed towards CDCUs.  “Two excellent credit unions, Union Settlement and Neighborhood Trust, received awards along with the Federation, but the extremely low representation of credit unions among awardees concerns us greatly: credit union funding in this round was barely above 3 percent, an all-time low.”

“We have seen significant positive changes in the Fund’s awards over the past year, thanks to the efforts of the CDFI Fund’s committed staff, but we remain concerned about the underrepresentation of credit unions among awardees.  Credit unions are central to the CDFI industry because in addition to affordable financing, they provide low- and moderate-income communities with a full range transaction and insured deposit services, asset-building programs, financial literacy education, and other lifeline products that are so desperately needed in the current economy,” he added.

Beyond Financial Assistance Awards

In addition to today’s announcement, the CDFI Fund awarded $4.4 million four days ago to 10 CDFIs through its Native American CDFI Assistance (NACA) program, which is designed to encourage the creation and strengthening of certified CDFIs that primarily serve Native American, Alaskan Native, and Native Hawaiian communities. Of the 10 NACA awards, two went to credit unions, $470,000 to Federation-member Molokai Community FCU (Kaunakakai, HI) and $225,000 to First Hawaiian Homes FCU (Hoolehua, HI). 

While the percentage of total NACA awards to CDCUs was higher at 6.45%, CDCUs represent nearly 20% percent of the CDFI industry, and the Federation is committed to closing this gap. 

“We will continue to advocate vigorously for CDCUs to receive grants commensurate with their leading role in community development finance,” said Rosenthal.  “We look forward to working closely with the Fund to determine the barriers to increased credit union funding, especially at a time when financial services are so desperately needed in low-income communities, and when CDCUs have been hard hit by credit union system problems not of their making.”

FY2009 FA and NACA awards breakdown:

FY09 Financial Assistance (FA) Awards to Credit Unions
Neighborhood Trust FCU	New York	NY	$350,000
Union Settlement FCU	New York	NY	$500,000
Total FA to credit unions			$850,000
Total FA disbursed			$52,715,000
% of Total FA awards to credit unions				1.61%
FY09 FA Awards to Credit Union Affiliate Organizations
National Federation of CDCUs	New York	NY	$750,000
Total FA to credit union affiliates			$750,000
Total FA to credit unions and affiliates			$1,600,000
% of total FA to credit unions and affiliates				3.04%
FY09 NACA Awards to Credit Unions
Molokai Community FCU	Kaunakakai	HI	$470,000
First Hawaiian Homes FCU	Hoolehua	HI	$225,000
Total NACA to credit unions			$695,000
Total NACA Disbursed			$4,400,000
% of total NACA to credit unions				6.45%

© 2009 National Federation of Community Development Credit Unions.