Predatory Relief and Intervention Deposits (PRIDEs) partially collateralize loans that CDCUs make to combat high-cost, predatory lending in their local communities. The Federation shares the risk by assuming the risk on 25% of the loan principal. As the credit union books loans to members that are victims, or about to become victims, of predatory lenders, funds from the deposit are transferred to accounts pledged to the credit union to support these loans. Any losses are to be shared pro-rata between the credit union and the Federation. When the PRIDE deposit matures, the credit union repays the Federation the original deposit amount less the Federation’s share of losses realized on anti-predatory loans secured by the deposit on a per loan basis. PRIDEs can be used to support the following types of lending:
- Alternatives to Payday lending
- Assistive Technology
- Automobile title lending
- Tax refund anticipation lending
Federation member credit unions with low-income designation that meet our general Eligibility Criteria, have at least two years of general lending experience, AND at least six months of lending experience specific to the anti-predatory loan product for which the credit union is applying are eligible to apply for PRIDEs.
The Federation makes Predatory Relief and Intervention Deposits of up to $100,000 with maturities that range from 2 to 4 years depending on the loan product. Interest rates are variable. Please contact us for current rates.
How to Apply
Download and complete the PRIDE application form and submit with required documents by email to the Federation per provided instructions. Applications for risk-sharing deposits and secondary capital are accepted on a continuous basis but are considered for approval only at the triannual meetings of the Community Development Investments Committee.