CDFI Process Becoming Clearer, Easier for CUs

Low-income credit unions in the Northwest who are eligible to be certified as Community Development Financial Institutions may be able to take advantage of a new streamlined application process.

Representatives of NCUA’s Office of Small Credit Union Initiatives are contacting low-income credit unions that are not yet CDFI-certified, but that could be eligible for the streamlined application process. NCUA can do much of the required pre-qualification work, using existing AIRES data.

“Over the past five years Northwest credit unions have been awarded nearly $8 million dollars from the (U.S. Department of the) Treasury’s CDFI Fund. Those dollars have been deployed to help the most vulnerable members of society,”  said John Trull, AVP of Regulatory Advocacy for NWCUA and Association point person on helping Northwest credit unions to navigate the process.

“Simplifying the certification process for well qualified credit unions is a real benefit.”

CDFI certification is determined by the Community Development Financial Institutions Fund, a division of the U.S. Department of the Treasury. The program gives certified credit unions more tools to further local economic development. A CDFI-certified credit union becomes eligible to apply for multiple programs offered by the CDFI Fund, including direct funding through awards or grants. 

Trailhead CU sees path to serving member business needs

For CDFI credit unions, this could mean access to five-, six-, or even seven-figure grant awards that can be used to grow capabilities and further their mission to serve members and serve their community. CDFIs also can take advantage of technical assistance, training, and capacity-building initiatives to support their missions.

“The certification reinforces our commitment to serving the needs of our community and helping both consumers and small businesses achieve their individual paths to financial success,” added Jim McCarthy, CEO of Trailhead Credit Union in Portland. “The certification allowed us to then apply for a CDFI Fund grant with the goal of offering affordable financing to micro-businesses in our community, which in turn, promotes economic growth and stability in the area.”

Just last month, Trailhead was awarded $1.1 million. Last year, the CDFI Fund supported more than $200 million in grants and awards, with just over $31 million going to CDFI-certified credit unions. The more credit unions that become CDFI-certified and successfully apply for available funding, the more available CDFI Fund dollars can flow into credit unions and help them improve their members’ financial lives.

Working with NCUA assistance, interested and eligible credit unions will still be responsible for completing the few remaining data requirements and for directly submitting their applications to the CDFI Fund. However, NCUA can save these credit unions time in the process by providing many of the necessary data points.

“Even with a simplified process there is a significant commitment of resources, a lengthy grant application, and substantial grant reporting requirements, not to mention the annual recertification” Trull added. Credit unions interested in pursuing the CDFI application process should contact Trull, directly.

Has your credit union been contacted? NCUA Resources Now Available

Several online resources are available to help you learn more about the new process and CDFI certification. They are:

CDFI Certification – More Than One Way to Get There : A recording of the June 23 joint-agency webinar explaining the two methods a credit union can become a CDFI.

CDFI Fund Certification: A video explaining the benefits of CDFI certification and guidance from the CDFI Fund for credit unions using the traditional application.

CDFI-LID Fact Sheet: A quick-reference on the differences and benefits of the CDFI Fund’s certification and NCUA’s designation.

CDFI Fund website: For information about the CDFI Fund’s award programs.

Questions about this story? Contact Eric Horvath: 503.350.2222, ehorvath@nwcua.org.

Posted in Federal, NCUA, NWCUA.