And CU Strategic Planning is leading the way for CDFI credit unions!
On Sept. 23, 1994, President Bill Clinton signed the Riegle Community Development and Regulatory Improvement Act of 1994 into law, establishing the Community Development Financial Institution Fund (CDFI Fund) as part of the US Treasury Department. It was created to ensure that underserved communities gained access to reliable and affordable financial services and encourage financial institutions to meet the needs of the communities they serve.
Over the past 30 years, the CDFI Fund has provided over $7 billion in direct financial support and $76 billion in tax credits to support Community Development Financial Institutions and their mission-driven lending, supporting economic growth and stability where it’s most needed.
We have got to find ways to reach into the isolated areas of America to bring the promise of America. Ultimately, that is what this whole idea of community development financial institutions are all about.”
Today there are over 1400 of certified CDFIs, and 496 of those are credit unions. CU Strategic Planning’s work with CDFI credit unions is central to our North Star: unlocking opportunities for credit unions to change lives and their communities. Since our founding in 2008, CU Strategic Planning has assisted 203 credit unions in becoming CDFI-certified. Today, we work with one-third of all currently CDFI-certified credit unions.
Credit unions are the second largest group of CDFIs after loan funds. They have experienced the fastest growth as a category over the last 10 years, more than doubling their numbers from 241 in 2014 to 496 in 2024.
CDFIs have an estimated $222 billion in assets. They provide financial services to families in low-income or minority communities, who are often overlooked by mainstream banking—CDFIs labor to create jobs and housing while battling generational poverty. CDFIs bring opportunities.
Our Work with CDFI Credit Unions
CU Strategic Planning is proud to partner with CDFI credit unions. US Treasury Secretary Janet Yellen has stated that every dollar injected into a CDFI creates an eightfold return in its community. We have secured nearly 500 grants for our CDFI credit unions, yielding $4 billion in impacts in their communities. Overall, we have secured over $1 billion in funding awards for our credit unions in the form of both grants and secondary capital from the CDFI Fund, the US Treasury’s ECIP program, and many NCUA awards.
The CDFI Fund offers various programs that provide monetary support and training for mission-driven financial institutions, with impacts that can be seen down to the individual level. At the center of these are the CDFI and NACA Program Awards, the annual Financial Assistance (FA) and Technical Assistance (TA) grants. These showcase the everyday work that CDFIs do in their communities and fund business plans focused on the unique needs of the communities they serve, including specifically designed financial products and partnerships.
Since 2009, we’ve helped credit unions win 291 of these FA awards, with 81 awards announced just last week in the most recent 2023/2024 round. These awards allow credit unions to make a difference solving critical issues in their communities, like affordable housing.
Grant strategies with a housing focus – whether affordable housing, first-time home ownership, eviction prevention, or household stabilization – account for 40% of the FA awards won for our credit unions. But the categories for need go on and on, from microbusiness loans to financial inclusion to workforce development.
CDFI Impact Beyond Awards
Financial awards only supplement what CDFI credit unions do for their communities every day. We reviewed the overall 2023 lending of a sample of 149 of our CDFI credit union clients – beyond that tied to any specific award program.
These 149 credit unions originated more than one million loans to low-income and otherwise financially underserved individuals and families in 2023 alone! Those loans totaled a massive $21 billion, including 20,435 residential mortgages and 404,016 car loans.
Given that America’s Credit Unions research found that the average credit union mortgage saves a family $50,000 over 30 years compared to a bank loan, so this cross-section of CDFI credit unions will allow homeowners that need it most to retain more than $1 billion in their pockets. And for auto loans, a conservative estimate puts the amount saved over the course of a five-year car loan at around $535 per credit union member compared to a bank loan, which equals more than $215 million for this group of borrowers. It’s likely that these CDFI credit unions are saving their members even more, given that low-income and disenfranchised populations that they serve are often otherwise at the mercy of lenders such as buy-here-pay-here dealerships (BHPH), where loan rates can be between 15% and 20%.
Continuing to Unlock Opportunities for Credit Unions
As credit unions and other CDFIs continue to partner with the CDFI Fund to inject capital into rural banking desserts and minority-majority communities, CU Strategic Planning is proud to play a role in unlocking opportunities for credit unions to change lives and their communities. We will continue to push for financial inclusion and housing that doesn’t break the average American’s bank. We will continue bringing new ideas and a fighting spirit to our work because we know our credit unions have our backs in this effort.