The National Credit Union Administration and the U.S. Treasury Department’s Community Development Financial Institutions Fund recently signed an agreement to streamline the application process for low-income credit unions to become certified as community development financial institutions.
Credit unions that obtain CDFI certification can access training and competitive award programs provided by the CDFI Fund, which can aid these institutions’ capacity to provide safe and affordable financial services to underserved communities, according to the NCUA.
“This memorandum of understanding opens up enormous possibilities for credit unions,” NCUA Board Chairman Debbie Matz said in a news release. “By facilitating the CDFI application process and, ultimately, increasing the number of certified CDFI credit unions, we’re laying the foundation for greater access to affordable financial services and more investment in local communities. This will help credit unions better serve members and communities that have been difficult to reach, and that will help more people build wealth and more secure financial futures for themselves and their families.”
“CDFIs nationwide are making a real difference in low-income communities by providing consumers with safe and affordable financial services and by providing neighborhood businesses with access to capital,” CDFI Fund Director Annie Donovan said in the release. “Many low-income credit unions are already performing this important work, but need more support. By partnering with NCUA to increase the number of credit unions certified as CDFIs, we will not only expand access to the CDFI Fund’s programs but also reach more unbanked and underbanked individuals.”
The NCUA plan has a goal of doubling the number of certified CDFI credit unions by the end of 2016. Increasing the number of certified CDFI credit unions could significantly expand funding that can be used to offer financial services to underbanked low-income individuals and increased investment in local businesses, affordable housing and community facilities, according to the release. There are 295 credit unions certified as CDFIs, most of which also hold NCUA’s low-income credit union designation.
To learn more, see www.ncua.gov/newsroom/Pages/news-2016-jan-community-development-financial-institutions.aspx#sthash.miKuK4Pk.dpuf.