The Importance Of Being Community-Focused

Certified CDFI credit unions bring a hyper-local focus to their community work. Here, four leaders discuss the missions of their organizations in today’s tumultuous environment.

In 1994, Congress created the Community Development Financial Institutions (CDFI) Fund at the U.S. Treasury. The Fund promotes economic revitalization in distressed communities throughout the United States by directing financial assistance to certifiedfinancial institutions.

As of August 14, 2020, when the most recent data set became available, 1,135 financial institutions were actively certified CDFIs. Of those, 313 were credit unions. With the certification, credit unions can apply for grants or educational assistance fromthe CDFI Fund as well as access capital from secondary sources such as foundations, development organizations, banks and trusts, and more.

The Fund determines eligibility for assistance by evaluating whether the CDFI meets five primary characteristics:

  • Has a mission of community development.
  • Serves a target market.
  • Is a financing entity.
  • Provides development services.
  • Remains accountable to its community.

CDFIs work to empower unbanked and underbanked individuals to enter the financial mainstream. Although these are not the only institutions to do so, CDFIs are different from other banks and credit unions in that community work is central to their missions.

CDFI credit unions have the ability to respond to and invest in areas that other financial institutions, particularly for-profit financial institutions, would not, says Carla Decker, CEO of DC Credit Union ($72.9M, Washington, DC).

The coronavirus pandemic has disrupted life in the United States, and certain populations have felt the economic and social impact more acutely than others. Often, these are the same populations that certified CDFI credit unions serve, which further highlightsthe important role these hyper-local community-focused cooperatives play in American life.

Leaders from four certified CDFI credit unions serving

communities from Louisiana’s western edge to New York City and with assets ranging from $5 million to $120 million discuss the populations they serve, the work they do, the importance of capital, and how COVID-19 has changed how theyview their mission.

October 5, 2020

Keep Reading

View all posts in:
More on:
Scroll to Top
Verified by MonsterInsights