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From Application to Award and Beyond - A Step-by-Step Guide to Federation Investments

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Applying to Community Development Investments 

  • The Committee meets four times a year to review requests for funds from credit unions.  We provide notice well in advance of each Committee Meeting.
     
  • Non-members may apply.  However, any non-member credit unions submitting applications must become a policy member before being eligible to receive capital investments.In order to be considered at a meeting of the Committee, applications must be received by the quarterly deadlines, usually five weeks prior to the meeting.
     
  • Applications received after the deadline are considered at the next quarterly Committee meeting.
     
  • CDCUs requesting more than one capital product are required to complete and submit applications for each oneIf an application requires further information and clarification, Community Development Investments staff may contact the applicant before submitting the request to the Committee.  If gaps in the application are substantial, staff may postpone submission to the Committee.
     
  • The Community Development Investments Committee may decide to:
    • Partially fund the request
    • Conditionally approve funding
    • Defer consideration because it requires more information
    • Reject the request
       
  • In order to ensure that the process is fair and objective, the decisions of the Committee are final -- which means that there is no appeal to the Committee or to the Board of the Federation.  ("Final" does not mean a credit union may not resubmit or modify its request or submit additional information for later consideration.)

Notification of Action & Follow-Up

Notification Letter
  • After the Committee makes its decisions, every applicant is notified.  Successful applicants receive award letters notifying them that their request has been approved for one or more investments.  Applicants also receive an outline of the general terms of those investments.
Investment Agreement(s)
  • A separate investment agreement for each product is awarded.
  • The investment agreement specifies:   
    • the total investment amount
    • the schedule of disbursements (unless there is a one-time-only payment)
    • the credit union's reporting requirements
  • The Investment Agreement must be signed by at least two officers of the credit union (e.g., Manager and Board Officer) and returned to the Federation. 
  • The Federation signs the agreement and returns a copy to the credit union.
  • Funds are disbursed in accordance with the agreement.

Issuance of Share Certificate (for deposits only)

  • If a credit union is approved for an insured deposit by the Federation, immediately after receiving funds the credit union must issue a Share Certificate and return it to the Federation.  Failure to issue a certificate promptly may result in a request to return the funds.

Financial and Reporting Obligations

  • A complete description of payments, reporting, and monitoring requirements is included in each Investment Agreement.  The general guidelines are as follows.
Payments
  • A credit union is required to make quarterly interest payments after the end of each calendar quarter. 
     
  • Late fees apply on interest payments received 15 days after due date at the rate of 5% of the amount of interest due.
     
  • Any payment of principal made 30 days or more after its due date is charged at the rate of 1% per month on the amount of principal due.
Default Provisions
  • There are two kinds of default: financial (failure to make scheduled payments) and programmatic (failure to carry out the agreed activities or fulfill the reporting requirements).
  • Except if prohibited by regulations, the Federation reserves the right to withdraw its funds in the event of either type of default.
     
  • Before withdrawing funds, the Federation will first attempt to provide any necessary support and/or technical assistance to a credit union that is in default of our agreement(s). 
Monitoring and Evaluation
  • The Federation is required to report to our investors on the uses and impact of all the funds provided to us.  To do this properly, we require reports from all participating credit unions over the term of our investments with them.
     
  • Typically, we require:
    • Quarterly narrative reports that discuss the performance of the credit union, and the outcomes and impact made possible by the investment
    • "Call reports" (NCUA form 5300) as submitted to state and/or federal regulators
    • Reports from independent auditors

Additional Disbursements

  • If a credit union's award provided for staged disbursements, the Federation requires documentation from the credit union that performance goals or other conditions were met, prior to disbursing funds.

Technical Assistance

  • As the Federation's resources and personnel permit, we will offer technical assistance to all credit unions that receive, apply for, or wish to apply for investments through Community Development Investments.
     
  • The scope of services offered ranges from general operations to specialized areas of community development finance.  We may offer this assistance through our staff, consultants, or our CDCU InstituteTM.

 



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