ONTARIO, Calif.–The California and Nevada CU Leagues’ hosted a pair of workshops designed to provide additional information on what is involved in gaining Community Development Financial Institution (CDFI) certification from the Treasury Department, as well as why a credit union might want to do so.
The CDFI certification can assist a credit union in expanding outreach to underserved markets, and also makes the CU eligible for federal funds.
"It's a valuable credential that sets a credit union apart in the market place," said Pablo DeFilippi, vice president of membership and business development for the National Federation of Community Development Credit Unions. "In addition to potential grant funding, it can be used for community awareness purposes, and to obtain certain regulatory flexibility."
The two events, with support from CUNA Mutual Group), brought together experts from the Federation who facilitated the all-day presentations. The CNCUL said the events were “another touch point brought about by a recent partnership between the Leagues and the Federation, which came together in early November to promote how credit unions can serve locally underserved Hispanic immigrants through the Juntos Avanzamos initiative.”
“CDFI certification is one of the building blocks of community finance,” added Terry Ratigan, senior consultant for the Federation. “A grant from the CDFI Fund is essentially equity. It’s net worth that your credit union can leverage for more loans. So far, credit unions are leveraging more private capital than any other type of CDFI.”
One misconception that was clarified during the meetings: Becoming CDFI-certified isn’t based on where your members live—it’s about what your credit union offers in products, services, education, and other outreach activities. Out of seven test areas (legal / primary mission / financing / non-governmental entity / accountability / target market / development services), credit unions naturally fit most of them, with the remaining two being the most critical to pass: target market and development services, organizers said.
CUNA Mutual Group is providing up to 30 grants to partially cover the cost of preparing a CDFI certification application. Funds will be allocated on a first time-first served basis. The Federation is encouraging interested credit unions to act quickly.