Three NW Credit Unions Win CDFI Grants To Help Low-Income Communities
October 8, 2013
Oct. 8, 2013
“By providing affordable credit and capital, CDFIs play a unique role in creating jobs, generating economic growth and revitalizing neighborhoods in America’s low-income and economically-distressed communities.”Don Graves, Assistant Secretary of U.S. Treasury Department
Three Northwest credit unions have been awarded nearly $700,000 from the U.S. Treasury Department’s Community Development Financial Institutions fund for financial and technical assistance.
The annual awards, announced in Washington, D.C., by Assistant Treasury Secretary Don Graves, enable CDFIs to increase lending and investments in low-income and economically distressed communities. More than 190 credit unions, banks, loan funds, and venture capital funds received awards for 2013, totaling more than $172 million.
“By providing affordable credit and capital, CDFIs play a unique role in creating jobs, generating economic growth and revitalizing neighborhoods in America’s low-income and economically-distressed communities,” Graves says. “Building on nearly two decades of Treasury support for CDFIs, the awards announced today will allow these financial institutions to better meet the investment and lending needs of the communities they serve.”
Seattle-based Express Credit Union, and Cascade Forest Products Credit Union in Vancouver received Technical Assistance awards, which are capped at $100,000. Technical Assistance awards can be used for purchasing equipment, paying salaries and benefits, and training staff and boards.
Newrizons Federal Credit Union received a $495,000 Financial Assistance award. Financial Assistance awards of up to $2 million allow CDFIs to sustain and expand the financial products and services they offer.
Newrizons will use its award to add $300,000 to its capital fund and $195,000 to its allowance for loan losses. Newrizons serves Grays Harbor County in western Washington. The county, which has had perpetually high unemployment for the last decade, was particularly hard hit during the recession.
“The CDFI award will allow us to continue to develop our trust-enhancing products, which are designed to give the underserved and overcharged the financial tools they need for financial success,” says Newrizons CEO Ynette Gibbs. “At Newrizons, we take a holistic approach to help our members become financially fit.”
Newrizons offers high-risk borrowers a second chance, but not by extending credit that would simply continue a perpetual cycle of debt. Instead, the credit union offers one-on-one financial education and lifestyle coaching designed to improve financial habits and encourage saving.
In an effort to help members of modest means achieve their dream of homeownership or a college education, for example, Newrizons plans to roll out a matching savings program called Individual Development Account. The program will allow an employed member with a net worth of less than $10,000—and who makes less than 200 percent of the federal poverty limit—to open a savings account for the specific purpose of going to college or owning a home.
For every dollar that members save up to $2,000, they will receive a matching dollar from a Treasury Department Assets for Independence grant and another matching dollar from the community (BECU has already committed $40,000 to support the project), turning $2,000 in savings into a $6,000 nest egg.
Members must also complete a financial literacy program, along with either a homeownership class or a college financial-assistance education program. Newrizons would then write a check to the mortgage company or college.
Newrizons expects that as many as 285 people will benefit from the program over the next few years.
“The work that these credit unions are doing in the community is truly outstanding” says John Trull, director of regulatory advocacy for the Northwest Credit Union Association. “The grants help, but it is the commitment of credit union staff that helps end the cycle of poverty in these economically distressed communities.”
Questions? Contact Gary Stein: 503.350.2216, email@example.com.
Posted in Awards.