Cliff Rosenthal, Executive Director

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CDCUs, The Federation, and the Credit Union
Movement 2004-2005
Cliff Rosenthal, Executive Director June 10, 2005
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Community Development Credit Unions A Tale of
Two Movements?

• It was the best of times, it was the worst of
  times
• A Tale of Two Cities
• Charles Dickens

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Vital Signs Robust Growth in 2004

• The Federations CDCU Members
• Total Assets -- up 377 million, to 3.35 billion
• Total Membership -- up by 66,241 to 896,835
• Net Worth -- up by 41 million to 320 million

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CDCUs Outpaced all FICUs by Many Measures.
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The Typical (Median) CDCU Did Well.
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• But .
• small credit unions are an
• endangered species!

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2004-05 was the worst period ever for CDCU
mergers and liquidations!

• CDCUs lost 25 (11 of our members)
• All CUs lt10 million lost 8.4
• All CUs lost 3 (gt300 of 9,500 CUs)

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Mergers and Liquidations, 2004-0511 of
Federation Membership!

• Liquidated (3)
• Brooklyn Ecumenical FCU (NY) Appalachian
  Development FCU (OH)
• Austin/West Garfield FCU (IL)
• Merged (22)
• Westshore Com. FCU (MI) Caswell CU (NC)
• Denver CDCU (CO) Citizens East CDCU (PA)
• North Florida FCU (FL) Henry Street Settlement
  FCU (NY)
• Little Haiti-Edison FCU (FL) York Citizens FCU
  (AL)
• Washington County FCU (TX) JCC FCU (OH)
• Perquimans CU (NC) LexLinc CDFCU (KY
• South End FCU (MA) New Horizons FCU (PA)
• United Communities FCU (DE) Chattachoochie FCU
  (GA)
• North Gulfport Com. FCU (MS) Chatham-Lee CU (NC)
• Hacienda Community CU (OR) Weld FCU (CO)
• South End FCU (MA) NOME FCU (LA)

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Profile of Merged/Liq. CDCUs
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LexLinc CDFCU
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LexLinc Liquidated 6/05
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Why the failures? Top 10 List

• Layoffs/deteriorating economy
• Loss of sponsor or grant support
• Mismanagement
• Failure to thrive (esp. new CDCUs)
• Unsustainable/poorly planned growth (branches)

• Prompt Corrective Action (PCA)
• Fraud
• Cant compete
• Lack of succession for board
• Reg Crush

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A Year of Progress Highlights of Our Anniversary
Year 2004-05

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Highlights, 2004-05

• 3.7 million invested in CDCUs
• Fighting predatory lending
• 250,000 in Apple Grants to CDCUs to promote
  alternatives to payday lending
• 1.5 million in PRIDEs (Predatory Relief and
  Intervention Deposits) outstanding or committed
• Antidotes to Payday Lending
• CDCU Mortgage Center
• 1 million seed grant from CDFI Fund
• Linkages with PHH Mortgage CU Partners
• LLC established

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More Highlights

• CDCU Institute
• peak attendance
• NCUA support for scholarships
• CDFI Fund Return of SECA
• 6 CDCUs won FA awards 3.373 million
• 14 CDCUs received T. A. awards 621,445

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Membership

• 24 new member CDCUs
• Our total membership down only slightly, from 225
  to 224.
• New members range from lt 1 million to more than
  100 million.

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New Members, 2004-05

• Kootenai Valley FCU (Libby, MT)
• Mendo Lake CU (Ukiah, CA)
• Queens Cluster FCU (Bayside, NY)
• S.A.M.P. Scranton FCU (Scranton,) PA
• Ashoka CU (Boulder, CO)
• Saint John A.M.E. FCU (Niagara Falls, NY)
• St. Margarets CU (St. Louis, MO)
• Dress Makers CU (New York, NY)
• West Texas CU (El Paso,TX)
• Chicanos por la Causa FCU (Phoenix, AZ)
• Deere Community Federated CU (Ottumwa, IA)
• Kau FCU (NaAlehu, HI)
• Morning Star FCU (Tulsa, OK)
• Table Rock FCU (Shell Knob, MO)

• Macedonia Baptist FCU (Mt. Vernon, NY)
• Central Dallas FCU (Dallas, TX)
• Harlem Heights FCU (NY, NY)
• St. Phillips FCU (NY, NY)
• Jemez Valley CU (Jemez Springs, NM)
• TCC CU (Dallas,TX)
• Sturgis Community FCU (Sturgis, SD)
• El Barrio FCU (NY, NY)
• Greater Harrisburg Comm. CU (Harrisburg, PA)
• New Life CU (Philadelphia, PA)
• Total 24

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Community Development Partners

• Increased to 29 credit unions.
• Six of the 10 largest credit unions.
• 50 billion in assets, 5 million members

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Community Development Partners, May 2005

• TC FCU (MI)
• Water Power CU (CA)
• Andrews FCU (MD)
• Vantage CU (MI)
• Arrowhead CU (CA)
• SCE FCU (CA)
• Cincinnati Central CU (OH)
• Houston Municipal Employees CU (TX)
• The Summit FCU (NY)
• Bay FCU (CA)
• Community Educators CU (FL)
• Hughes FCU (AZ)
• LA DOTD FCU (LA)
• Lafayette FCU (MD)
• Tremont CU (MA)

• Navy Federal CU
• State Employees CU (NC)
• Orange County Teachers FCU
• Boeing Employees CU (WA)
• Patelco CU (CA)
• State Employees FCU (NY)
• Visions FCU (NY)
• Ukrainian FCU (NY)
• Suffolk FCU (NY)
• IBM Metro FCU (NY)
• Anheuser-Busch CU (MO)
• Suncoast Schools FCU (FL)
• Sunmark FCU (NY)
• North Jersey FCU (NJ)

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A Closer Look
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Capitalization Program

• Invested in CDCUs
• 250,000 in APPLE (anti-predatory)
• 3.7 million in other investments (Deposits,
  PRIDEs, equity grants)
• Bridge Grants 500,000 to other CUs (CDCUs)
• Obtained New Increased Investments
• Mennonite Mutual Aid (1 million)
• Catholic Healthcare Initiatives (250,000)
• National Co-operative Bank FSB (250,000)
• Pending 3 million from Bank of America

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Governmental Affairs NCUA

• Federation Testimony on Capital to NCUA Helen
  Godfrey, Melissa Marquez
• Chairman JoAnn Johnson at Federations Financial
  Literacy Day in New York
• Federation co-sponsored NCUA PALs workshops
  Boston, Orlando, St. Louis, Rochester (NY)
• NCUA White Paper Guidance for Examining CDCUs
• Federation meeting with Regional Directors and
  top Washington staff
• Campaign to get set-aside of funding for CDCU
  Institute

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Governmental Affairs and Public Policy

• SACI Attack Bush Administration effort to
  eliminate CDFI other Community Development
  Programs
• Proposal slowed/halted?
• Community Reinvestment Act (CRA) and Credit
  Unions
• Federation opposed extension of CRA to large
  credit unions

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Education and Training

• CDCU Institute
• Each One, Teach Many
• Your Path to Financial Freedom

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The CDCU Institute

• 2004
• 4th graduating class. Total grads, 199-2004 41
• 30 scholarships (tuition, room, board) from NCUA
  in 2004
• 2005
• New location and format Madison, Aug. 15-20
• At least 30 scholarships
• Grant from National Credit Union Foundation

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The CDCU Institute

• 2004
• 4th graduating class. Total grads, 199-2004 41
• 30 scholarships (tuition, room, board) from NCUA
  in 2004
• 2005
• New location and format Madison, Aug. 15-20
• At least 30 scholarships
• Grant from National Credit Union Foundation

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Financial Literacy Each One, Teach Many

• Total Train-the Trainer seminars to date
• 498 trainers
• 7,956 community members
• 2004-05 sites NJ, NY, CA, NH, VA, IL, NC, CA,
  PA, DC, WA
• Funding J.P. Morgan Chase, Citibank, North Fork
  Bank, Mizuho Foundation
• Financial Literacy Day October 22, 2004
• In the works Disability module for Your Path
  to Financial Freedom

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Technical Assistance

• Helped 21 CDCUs with CDFI Fund applications ?
  good year for funding
• Helped avert mergers and regulatory downgrades
• Assisted CDCU/CDCU mergers and helped maximize
  NCUA assistance
• Assistance to organizing groups (telephone
  consultations, manuals, site visits)

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AmeriCorpsVISTA

• 21 VISTA members in 17 CDCUs, 11 states with
  more on the way.
• VISTA members raised more than 400,000 in grants
  and donations for CDCUs in 2004
• 7 VISTAs coordinated VITA/EITC campaigns
• 1,100 filings
• 1.3 million in refunds (500,000 EITC)
• New initiative VISTAs in disability orgs.

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Federation Networks

• Faith-based CUs
• 83 CUs 37 of Federation membership
• Merger losses two over 2 years
• Faith-based CU Conference
• New York Community Financial Network
• Record attendance at sessions, including NJ
• Harlem networking breakfast
• Financial Literacy Day 2004 (Union Settlement
  FCU)
• NY State CDFI Coalition 1 million for state
  CDFI Fund

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Networks

• Latino CU Network
• Meeting in Puerto Rico
• Service to immigrants study underway
• Proposal to host association of Latino CU
  professionals
• Youth CU Programs
• Enhanced participation in 2005 Annual Meeting

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Disability Outreach Network

• World Institute on Disability training sessions
  at CUs
• Federation addresses at national disability
  conferences
• Financial literacy module in process (funded by
  Mizuho)
• 8 VISTA placements in Disability Service
  Organizations

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Research

• CDFI Data Project
• New Publication Financial Trends in CDCUs
• New Custom Peer group analysis for all CDCUs
• New CDCU Affiliate Structures

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Opportunity Seize it. Make it. Defend it.

• Key strategies for 2005-06
• Launch the CDCU Secondary Market.
• Expand the Community Development Partners
  initiative.
• Assure the future of the CDCU Institute
• Fight to preserve CDFI Fund

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Launch the CDCU Secondary Market

• The CDCU Mortgage Center
• Bringing affordable mortgages
• to low-income communities

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Goals

• Purchase gt 250,000 in mortgages this year.
• Purchase/resell 15 million in three years.
• Create market for co-op loans, manufactured
  (mobile) housing loans.
• Link to a mutual fund and Wall Street to increase
  supply of capital.
• Engage C.D. Partners and other credit unions as
  sellers and purchasers of affordable mortgages.

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• Community Development Partners

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Why is the CD Partners Program Important?

• Expand services to more low-income communities
  (reach scale)
• Strengthen capacity of CDCUs through partnerships
• Build unity in credit union movement
• Strengthen our voice in the C.U. industry
• Build volume for our products, services,
  investment (e.g., CDCU Secondary Market)

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Possible Activities

• CD Partner to provide operational support to CDCU
• Latino/State Employees Back office
• Technology assessment/support/advice
• Shared branches
• Internships/exchanges between CDCUs partners
• Train CDPartner staff at CDCU Institute

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Assure the Future of theCDCU Institute

• Continue advocacy with NCUA
• Seek Congressional earmark
• Seek CDFI Fund support
• Develop other revenue sources
• Expand curriculum enrollment

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Fight to preserve CDFI Fund

• (and other community development programs).
• Sack SACI by
• Working through CDFI Coalition
• Mobilizing our members
• Mobilizing CUNA, NAFCU

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Looking Ahead Our Long-Term Challenges

• Where is the CU industry going?
• Where do CDCUs fit?
• What will/should our membership look like?
• A sustainable future for the Federation whats
  the business plan(s)
• Planning for Success(ion)

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A time to sayThanks!

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Our Members, Our leaders, and our Volunteers

• To our members who have supported us
• To Chairwoman Rita Haynes and the
• Executive Committee--Robert Jackson, Michael
  Chan, Sally Edward, Barbara Black
• Board Members
• Melissa Marquez, Joy Cousminer, John Dupree, Jr.,
  Sharon Saulters, Eunice Rogers, Helen Godfrey
  Smith, Arnell Willis, Suzette Cowell, Hiram
  Crawford, Gustavia Cole, Marvin Jensen, Robert
  Coleman
• Alternates
• Eddie Ayers, Gwen Parker, Saundra Scales, Harold
  Foster

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thanks to

• The Annual Meeting Committee
• Local Host Committee

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To our Funders Sponsors

• Ford Foundation
• Heron Fdn.
• CDFI Fund
• CUNA
• CUNA Mutual
• NCUF
• JPMorganChase

• HSBC Bank
• U.S. Central CU
• CA League
• Annie E. Casey Fdn.
• Patelco CU
• Bank of America
• PHH CU Partners
• Mennonite Mutual Aid
• Washington Mutual
• Citibank

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and our Coalition Partners

• CDFI Coalition
• National Disability Institute/National
  Cooperative Bank
• University of Iowa School of Law
• Southern New Hampshire University School of
  Community Eco. Development
• World Institute on Disability

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and to our Staff

• Ayokah Harrison-Holmes
• Rafael Morales
• Michael Strange
• Irene E. Prince
• Oulga Caesar
• Valerie Harrison
• Ivania Rodriquez
• Sara Batterton

• Alice Greenwald
• Ken Tiongson
• Thomas Henry
• Valerie Harrison
• Pamela Owens
• Brian Gately
• Greg Gemerer
• Aysatou Jobarteh

And consultants Cathie Mahon Terry
Ratigan Lillian Autler Sandy Burky
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And for the Recognition

• National Credit Union Foundation
• Herb Wegner Awards to
• Cliff Rosenthal (Individ.Achievement)
• Opportunities (Vermont Development) CU (Org.)
• African-American Credit Union Coalition
• Pete Crear Lifetime Achievement Award to
• --Rita L. Haynes (Aug. 12, Bahamas)

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The Federation. Helping Credit Unions Do More.

• National Federation of
• Community Development Credit Unions
• 120 Wall Street, 10th Floor
• New York, NY 10005
• 800-437-8711 / 212-809-1850
• www.cdcu.coop