Speakers Laud CDCUs for Leading Industry in Growth & Loan Rates
(June 20, 2012 – New York, NY) As millions of American’s across the nation continue to suffer from the greatest economic downturn since the Great Depression, the need for affordable financial services and responsible financing is greater than ever. Despite the challenges, community development credit unions (CDCUs) have been stepping up to help millions of people in need, bringing their years of experience and innovation in serving low- and moderate income people and communities to main streets across the nation. This was the focus of the National Federation of Community Development Credit Unions’ (Federation’s) the 38th Annual Conference on Serving the Underserved, held June 13-16 in Atlanta, Georgia. More than 275 credit union executives, board members, and other financial services providers came together for the event, traveling from as far away as Hawaii and Alaska in the United States, to credit union representatives from the Caribbean and Europe.
(Left to right) CUNA CEO Bill Cheney, Federation Chairman Lynda Milton and CUNA Chairman Mike Mercer.
Among dignitaries at the conference highlights included NCUA Board Chairman Deborah Matz; CDFI Fund Director Donna Gambrell; CUNA President/CEO Bill Cheney; CUNA Board Chairman and Georgia Credit Union and Affiliates CEO Mike Mercer; Caribbean Confederation of Credit Unions CEO, Melvin Edwards; NCUA Office of Small Credit Union Initiatives Director Bill Myers; and the Federation’s former President/CEO of more than 32 years Clifford N. Rosenthal, who made his final farewell address on Saturday, June 16.
“We are extremely pleased that CUNA Board Chairman Mike Mercer and CUNA President/CEO Bill Cheney were able to join us for the Opening Ceremonies this year,” said Pamela Owens. It’s the first time in a long while that CUNA’s leadership was on-hand to launch our conference and it shows the industry’s growing commitment and recognition of credit union efforts to serve low- and moderate-income people and communities.”
More CUs Serving the Underserved, Leading Industry in Member Growth & Lending
While some critics argue that small credit unions are not sustainable, CDCUs have shown otherwise throughout the financial crisis. Speaker after speaker at the 38th Annual Conference highlighted small credit union growth over the past year, which has been leading the nation in terms of membership growth, loan growth, and saving growth.
In his remarks at the Opening Ceremonies, CUNA Chairman Mike Mercer pointed to the impressive impact these institutions have been making. “During the depth of those crisis years (Dec ’07 – Dec ’09), lending at banks fell by 10%, but lending grew at credit unions by 8% and at CDCUs, lending grew by nearly 11%... Over the same time period, credit unions saw a savings influx of 18%, but saving grew by 24% at CDCUs,” Mercer added.
NCUA Chairman Matz echoed Mercer during her plenary presentation noting that “as a group, low-income credit unions led the nation in lending throughout the recession of 2008–2009, as well as the steady recovery of recent years. Between December 2007 and March 2012, low-income credit unions expanded loans by $11 billion (57.6 percent). During the same time period, the entire credit union industry expanded loans by $45 billion (8.6 percent), while banks and thrifts decreased loans by approximately $500 billion (6.3 percent).”
With this expansion of CDCU service to low- and moderate-income populations, access to resources has been critical for these community development lenders and the Federation has also been leading the way in helping credit unions tap into available resources, and the single largest source of expansion capital available to CDCUs has been the CDFI Fund, which has provided more than $120 million in grants to CDCUs since inception in the late ‘90s.
CDFI Fund Director, Donna Gambrell, who spoke at the Federation’s conference, noted that “the number of [CDFI] certified credit unions continue to grow... As of May 31, 2012, the CDFI Fund had certified 992 CDFIs, and 221 of these—or 22.7 percent of all CDFIs—were credit unions. One year earlier, we had certified 202 credit unions, so the number of certified credit unions has increased by almost 10 percent just in the past 12 months.”
CDCUs See Steady Growth, Will Continue Collaboration to Expand Impact
Federation Director of Membership Pablo DeFilippi noted that membership in the Federation is at an all-time high. “We now count almost 250 CDCU policy members of the Federation,” he said. “These credit unions are dedicated to serving communities marginalized by mainstream financial institutions and currently serve more than 2 million Americans and represent more than $13 billion in combined assets.”
“With more low- and moderate-income Americans than ever before, this growth in credit unions committed to serving the underserved is making a real difference in jumpstarting local economies and helping millions of Americans get back to work, and much of this growth has been possible thanks to capital infusions from the CDFI Fund. This is why the Federation has been tireless in helping more than 100 CDCUs become certified over the past 3 years, and has been a staunch advocate for increased resources for CDCUs.”
“But we will not rest on our laurels. There are still millions of Americans without access to a safe place to keep their money or affordable financing to start their businesses, but CDCUs and CDFIs are leading the way in helping these folks survive and thrive,” DeFilippi said.
Federation Interim CEO Pamela Owens reaffirmed DeFilippi’s sentiments. “CDCUs are a proven, scalable model and the Federation will continue to do everything within our power to bring our industry to the next level. We will accomplish this through partnerships and collaborations, through vision and innovation, and through the intimate relationships our CDCUs have with their members. As we celebrate the International Year of Cooperatives, we need to focus on cooperation and collaboration. Individually, our reach is limited, but together, our economic impact will ripple across the nation, and that is what the Federation is all about,” Owens added.
In his farewell address on Saturday, June 14, Cliff Rosenthal, former Federation President/CEO for more than 32 years remarked at the impact of the Federation on CDCUs. “In 1983, the Federation had no net worth. Zero. Today we have nearly $9 million in net worth… [and] the Federation has been able to make more than $15 million in secondary capital investments, more than $100 million in deposits, and several millions of dollars in grants to our members… The CDFI Fund we helped create has made more than $100 million in grants to CDCUs [and] the CDCI program… made $69.9 million in secondary capital loans [to CDCUs],” he said.
The Federation has “moved capital,” continued Rosenthal, “provided technical assistance, developed new programs, educated CDCU leaders, and put CDCUs on the financial map. But let us be known for this, above all… we have worked to demonstrate that [CDCUs] are viable, sustainable financial institutions serving low-income people and communities. But we are much more. We are drum majors for economic opportunity and justice. We are voices for inclusion. As we assemble here in Atlanta, birthplace and pulpit for Martin Luther King, Jr. we recall his words. As he summoned all of us to be, we are builders of ‘the beloved community’.”
© 2012 National Federation of Community Development Credit Unions.