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Program Overview
Since 1982, The Federation's "Capitalization Program for CDCUs" has helped credit unions strengthen their finances and expand their impact on low-income communities. CDCUs - like all credit unions - raise deposits which they relend to their members. But in low-income communities, raising deposits from people with little disposable income is a major challenge. Congress recognized this in 1970, when it gave low-income credit unions the exclusive right to raise deposits from "non-members" -- organizations and individuals outside the primary field-of-membership of these credit unions. To help CDCUs gather these funds, the Federation launched the Capitalization Program.
25th Anniversary Capital Campaign - In 2007, the Capitalization Program celebrated its 25th anniversary. Marking this important milestone, the Federation launched a capital campaign to raise an additional $25 million to invest in CDCUs across the country. As part of this campaign, the program focus has been redirected to bring maximum impact to our members, and rebranded itself as the Community Development Investment Program. Learn more about our 25th Anniversary Capital Campaign by clicking here.
Over the past 25 years, many foundations, banks, religious organizations, and other institutions have invested in local CDCUs through this program. The Ford Foundation, John D. and Catherine T. MacArthur Foundation, Mennonite Mutual Aid, Bank One, JPMorgan Chase, Bank of America, and the federal CDFI Fund are just a few of our investors.
Today, the Federation has more than $50 million in assets under management, with 80% deployment of our investments in more than 120 different CDCUs. We have become a virtual "one-stop-shop" for credit unions seeking funds to expand their activities: we provide not only deposits, but loans (secondary capital) and grants.
An investment in the Federation is a social investment in grassroots, cooperatively-owned and locally-controlled nonprofit institutions, focused on serving low- and moderate-income communities across nation. For investors looking for targetted impact, there is no better way to reach the world of CDCUs than through the Federation's Community Development Investment Program.
Inside Community Development Investments
For Community Development Investments program announcements and additional information for credit unions, please click here.
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Print/Download a Community Development Investment Application - click here.
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Investors and funders wishing to learn more - click here.
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The Federation is certified as a 501(c)(3), non-profit. Download our Letter of Determination - click here.
Special Grant Programs
Community Development Relief & Rebuilding Fund - To help community development credit unions and their members in the wake of Hurricane Katrina, the Federation established the Community Development Relief & Rebuilding Fund, raising nearly $1 million from individuals; member CDCUs; Federation board members and staff; and major donors including the National Credit Union Foundation, Jewish Funds for Justice, and the John D. and Catherine T. MacArthur Foundation.
The Community Development Relief and Rebuilding Fund has provided grants and secondary capital investments that have assisted a number of credit unions in Louisiana and Mississippi, both CDCUs and others, to embark on the long road of reconstruction. Contributions made to this fund have been directed to CDCUs serving people affected by Hurricanes Katrina and Rita. Contributions were be used to help CDCU membrs in desperate need and to keep affected CDCUs in operation so they can continue to serve and ruibuild their communities.*
* Please note that no contributions to this fund were used for administrative or other expenses of the Federation.
Alternatives to Payday Lending - Over the past several years, payday lending outfits have been spotlighted for the negative effects of their short-term, high-interest payday loans in low-income communities. These loans are overwhelmingly marketed in poor and minority neighborhoods as a temporary solution to help ends meet until their regular paycheck arrives. Most payday customers fip these two-week loans on avarage 7 times, the results are annualized interest rates between 400% and 800%. To address this disturbing trend and promote sustainable alternatives, the Federation has offered special grants and training seminars to help CDCUs compete with these unscrupulous lenders.
Bridge Project Grants - In 2004 the winners of its Bridge Grant competition were announced. Funded by the Ford Foundation, the program provided a total of $500,000 in grants to "mainstream" credit unions to expand their efforts to serve low-income communities. Many of the winning applicants worked in partnership with CDCUs on projects ranging from financial literacy tomigrant farmworker outreach, and from alternatives to predatory lending to high-tech kiosk branching.
