Treasury Announces Doubling of CDFI Credit Unions


For Immediate ReleaseNew York, NY – (January 19, 2016) – Treasury Secretary Jacob J. Lew announced plans to double the number of CDFI certified credit unions in remarks made at the HOPE Global Forums Annual Meeting on January 14, 2016. “Everyone deserves a chance at financial security,” said Lew, “But even in 2016, many Americans, especially low-income and minority families, are virtually locked out of the financial system.” Lew listed three key financial inclusion efforts: a focus on young Americans, helping Americans save for retirement, and expanding financial services in underserved communities.

The Treasury Department works with the Community Development Financial Institutions Fund to fund and support mission-driven financial institutions. Lew announced that Treasury will partner with the National Credit Unions Administration to double for number of CDFI-certified low income credit unions in 2016. There are 265 CDFI certified credit unions in the US today.

The Federation was instrumental in establishing the CDFI Fund in 1994 and is a permanent member of the the national CDFI coalition, and thus welcomes this groundbreaking agreement to increase the number of CDFI credit unions. “The Federation is pleased that the Treasury Department has chosen to work with credit unions to expand financial inclusion. Community Development Credit Unions provide safe, affordable and insured financial products and services to low- and moderate-income consumers throughout the country,” says Cathie Mahon, Federation President and CEO. “We look forward to working with Treasury, the NCUA, and the CDFI Fund on this historic expansion of CDFI certified credit unions.”

The agreement between the NCUA and the CDFI Fund will be signed on January 21, 2016. NCUA Chairman Debbie Matz says, “Since it was established in 1994, the Community Development Financial Institutions Fund has invested more than $2 billion in grants, investments and loans to financial intermediaries, $157 million of that in credit unions. Doubling the number of CDFI credit unions will allow significantly more low-income credit unions access to funding and technical assistance, available through the CDFI Fund, to serve underserved members and communities, and to expand financial products and services to them. We’re excited about this agreement and eager to get to work on the implementation.”

On February 22, 2016, the Federation is hosting the 5th Annual CDFI Roundtable at the GAC in Washington DC. Click here to register and meet our keynote speaker, Jessica Milano, Deputy Assistant Secretary for Small Business, Community Development and Housing at the US Department of Treasury.

An excerpt from Secretary Lew’s remarks relating to the expansion of CDFI credit unions appears below. To read the full transcript go to https://www.treasury.gov/press-center/press-releases/Pages/jl0319.aspx#.VplYKyXfpHI.email.

Communities
In addition to reaching out to include young people and eliminating the obstacles to retirement savings, Treasury is also helping to create and expand financial services offered in underserved communities. Without safe and affordable financial services, people often turn instead to alternatives that are very costly and can undermine a community’s financial stability while draining its wealth. And when people keep cash at home instead of in local institutions, that money does not work for them or their community and it is at risk of being lost, stolen, or spent. For twenty years, Treasury has worked through the Community Development Financial Institutions Fund to fund and support mission-driven financial institutions in some of our nation’s most distressed communities. The CDFI Fund has awarded more than $2 billion in grant funding to local community financial institutions all over the country. While we are proud of the work the CDFI Fund has achieved, we recognize that there is still more work ahead to reach individuals who still lack access to financial services in so many communities in our country.

Treasury is taking a number of steps to further leverage the CDFI Fund to include more communities. I am proud to announce that Treasury is partnering with the National Credit Union Administration to double the number of CDFI-certified low-income credit unions in 2016. This unprecedented increase will expand safe and affordable financial products and services in underserved communities. We are expanding the reach of our flagship CDFI Program to diversify the ways awards can be used for financial inclusion and raise awareness that CDFIs can partner with retail financial institutions to offer much-needed services. Our new budget will also propose to fully fund the Bank Enterprise Award Program, which provides funding to FDIC-insured banks and thrifts. As the program continues to evolve, these institutions can increase the number of small dollar consumer loans, youth savings accounts and other retail financial services they provide. And this year’s budget will propose a new Small Dollar Loan program to help CDFIs address the issue of predatory lending in their communities and provide an alternative to payday lenders.
About the Federation
The Federation was instrumental in establishing the CDFI Fund in 1994, is a permanent member of the national CDFI Coalition and is the CDFI and community finance authority for the credit union industry. The Federation’s member CDCUs represent 4 million members in low-income communities across the US, and we represent the majority of all CDFI-certified credit unions. The CDFI Fund is a unique source of capital for community development credit unions. CDFI grants can fuel growth in membership, deposits and loans in communities that are eager to join the cooperative finance movement. To date, the CDFI Fund has deployed $200 million in financial and technical assistance for CDFI-certified credit unions. Today, CDFI Certification is an essential credential for credit unions that seek a larger role in the development of their communities. In addition to representing CDCUs’ interest through advocacy with the CDFI Fund, the Federation is also an extensive resource for credit unions interested in learning more about CDFI-certification and offers expert certification and grant writing consulting services through its CU Breakthrough consulting group.

Media Contact:

Clarissa Ritter
Director, Marketing and Communications
critter@cdcu.coop

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