National Federation of Community Development Credit Unions

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National Federation of Community Development
Credit Unions

• Enhancing Your Community Development Efforts
• Presentation by Cliff Rosenthal to
• the CUES CEO Network

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The Federation.

• You do more for your members.
• So do we.

Since 1974
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Todays Presentation

• Introduction to CDCUs and the Federation
• Resources and Strategies
• Local Partnerships
• Federal/National Resources
• Private Resources
• Foundations
• Federation
• What Could Be

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Whats the Federation?

• National Federation of Community Development
  Credit Unions, Inc.
• Nonprofit Charity
• Founded 1974
• HQ New York City. Staff 20.
• 225 credit unions in 42 states, DC,PR 800,000
  members - 3 billion assets
• Leader in Community Development Finance (CDFI)
  industry

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The Federations Mission

• Strengthen credit unions serving low-income
  communities.

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A new era in Community Development

• The Federations Community Development Partners
  Program
• Serving low-income people is the business of all
  credit unions.
• CDCUs mainstream credit unions The Federation

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Federation Services Programs

• Capital deposits, secondary capital, equity
  grants
• Management consulting
• Education and Training
• Research
• Regulatory advocacy
• Special programs VISTA, faith-based CU network,
  Latino CU network, Disability Outreach

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Whats a CDCU?
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Whats a CDCU?

• A credit union with the specific mission of
  serving low-income people and neighborhoods
• Access to non-member deposits, secondary capital,
  other resources
• Not a 501c(3) charity
• May be a
• Commty Devel.Financial Institution (CDFI)
• Low-income credit union (LICU)

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Profile Typical CDCU

• Age 30 years
• Median Assets 1.4 million
• 1 million ? 900 million
• Median Membership 1,000
• Average loan size 3,500
• Typical loan loss rate less than 2

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What are Resource-Building Strategies?

• Local Partnerships
• Federal resources
• Private resources
• Foundations
• The Federation
• Community Development Partners
• Bridge Grants program

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Local CDCU Sponsors Partners

• Churches Faith-based orgs.
• Community Development Corps. (CDCs)
• Housing organizations
• Other nonprofits
• City government

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Federal/National Resources

• Housing
• Secondary markets
• Federal Home Loan Banks
• Business Lending
• Small Business Administration (SBA)
• New Markets Tax Credits
• Marketing/education efforts in low-income
  communities AmeriCorpsVISTA (through
  Federation)

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Federal Home Loan Bank

• Community Investment Cash Advance Programs
  (CICA) grants and low-cost, long-term funds to
  finance targeted housing projects, eco.dev., IDAs
• http//www.fhfb.gov/FHLB/FHLBP_economic_intro.htm
• http//www.fhfb.gov/FHLB/FHLBP_housing.htm

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Federal Resources

• Individual Development Accounts Dept. of HHS
  (AFIA program)
• IRS partnership for Volunteers in Tax Assistance
  (VITA), EITC

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Federal Resources HUD

• American Dream Down Payment Initiative
• Housing Counseling (NCUF grant application
  pending for CU affiliates)
• Housing Choice Vouchers
• Home Rehabilitation Program Section 203(k)

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Other Federal Resources

• U.S. Department of Agriculture, Rural and
  Community Development (www.usda.gov)
• NCUF grant to rural CUs for financial literacy,
  housing counseling
• Housing
• Direct Loans
• Single Family Housing Loan Guarantees
• Rental Housing Loan Guarantees
• Business
• Business and Industry Guaranteed Loan Program
• Rural Business Enterprise and Opportunity Grants

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Other Federal Resources

• Export-Import Bank (www.exim.gov)
• Assists export businesses and lenders via loan
  guarantees, credit insurance, direct loans, and
  other special initiatives (including encouraging
  new businesses in underserved communities).
• Assumes credit and country risks that private
  sector does not support.

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Federal Resources Restricted

• Low-income Designation or CDFI designation is
  required for
• NCUA Community Development Revolving Loan Program
• Community Development Financial Institutions
  (CDFI) Fund (Dept. of the Treasury)

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State/local resources

• State Depts. Of Vocational Rehab
• On-the-job training
• May provide portion of employee salaries during
  training
• Local
• Community development block grants?
• Housing Authority
• United Way

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Non-Government Foundations

• Credit union movement
• NCUF
• State Credit Union Foundations
• Private fdns. Best accessed through a nonprofit
  501c(3) charity
• Link with an existing one or
• Link with a CDCU or
• Start your own foundation?

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National Credit Union Foundation

• Callahan Fund
• Cooperative development
• Shared branches
• Hispanic outreach
• Geographical expansion to underserved
• Financial literacy
• Individual development accounts

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State C.U. Foundations

• Provide grants and assistance to CUs and their
  communities.
• NCUA LICU designation is not usually required to
  receive grants.
• Funded by combination of local fundraising and
  Community Investment Fund (CIF) money from NCUF.
• Often limit grants to CUs with smaller asset size

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State C.U. Foundations

• Funds often provided for
• Youth Financial Education
• Technical Assistance
• Technology resources for small CUs
• Extension of services to underserved
• Small CU development

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Federation Resources

• Our Community Development Partners program
• Assistance in developing partnerships
• Consultation on grant applications
• CDCU Institute to train your staff
• VISTAs
• IDA matching funds (when available)

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Community Development Partners

• Andrews FCU Arrowhead CU Boeing Employees CU
  Cincinnati Central CU Houston Municipal
  Employees FCU Lafayette FCU Navy FCU
  Patelco CU SCE FCU State Employees CU (NC)
  State Employees FCU (NY) T C FCU Tremont CU
  Vantage CU Water Power Community CU

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Bridge Grants

• Program funded by Ford Foundation through
  Federation
• Why Ford funded
• Desired outcomes
• Winning proposals what we learned

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Bridge Grant Program

• Purpose
• To increase the community development impact of
  mainstream CUs
• Who funds it? The Ford Foundation
• Why?
• Untapped potential to increase community
  development impact in low-income communities
• Mainstream credit unions Technology, human, and
  financial capacity
• CDCUs knowledge, experience, and trust

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Bridge Objectives

• Test different operational and partnership models
  
• Partnership with CDCUs preferred, not mandatory
• Produce comparative data
• cost/benefit analysis
• outreach, service and impact
• Identify what works

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Bridge Goals

• Increase C.U. impact on low-income communities
• Potential sustainability and replication
• Scalability
• Documentation and Evaluation

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Applicant Pool

• 21 applications received
• From partnerships among 36 credit unions
• Representing 26.4 billion in assets and 2.5
  million members across the country
• 7 winners (6 operational grants, 1 evaluation
  grant)

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Bridge Awards Financial Literacy

• Bay Federal Credit Union
• Santa Cruz Community CU (SCCCU)
• Partnership to extend financial literacy programs
  throughout the Pajaro Valley
• Engage youth and low-income adults in secondary
  schools and community colleges

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Bridge Awards Serving Farmworkers

• Community Educators Credit Union
• New branch in Fellsmere, Florida
• Will serve migrant and farm worker population
• Partnering with Operation Hope, a local family
  resource center
• Will consult with Community Trust CDCU on
  outreach and product development

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Bridge Awards Homeownership Technology

• Heritage Family Credit Union Vermont
  Development CU
• Lend technical skills and capacity to provide
  high-tech technology platform and increase
  automation
• Develop a joint homeownership-counseling program

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Bridge Awards CUSO to reach Latino Immigrant
Market

• OAS Staff FCU/IDB-IIC FCU and District Govt EFCU
  (Washington D.C.)
• Establish a CUSO that will operate as a shared
  branch for the Latino and immigrant community of
  Mt. Pleasant, DC
• Use multi-lingual/multi-cultural financial
  education to reach potential members

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Bridge Awards CUSO to provide multi-cultural/mult
ilingual services

• Patelco CU Northeast Community FCU, Mission
  Area FCU (San Francisco)
• Establish a CUSO to provide multi-lingual and
  multi-cultural service to members
• CUSO will open a satellite branch and two field
  offices

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Bridge Awards Fighting Predatory Lending (Refund
Anticipation Loans)

• The Summit FCU (Rochester, NY) Alternatives FCU
  (Ithaca)
• Provide an affordable alternative to refund
  anticipation loans during tax season
• Offer comprehensive financial services to
  partners of the Rochester CASH Coalition, an
  effort to provide free tax services to low-income
  families

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Bridge Awards Documenting Latino Community CU
model

• State Employees CU Latino CCU
• Special evaluation grant to document and evaluate
  their existing partnership
• Serves as a model for the potential growth of
  CDCUs

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The Bridge Grants Program

• What Weve Learned So Far
• Tremendous appetite for comm. develop. work
• Innovative partnerships already at work
• Need a platform to share and document best
  practices
• Mainstream C.U.s provide a range of technology,
  outreach, financial literacy and other linkage
  strategies
• CDCUs can share proven models with mainstream
  partners (i.e. affordable RALs, financial
  literacy)

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• Even though there is great disparity in the
  asset sizes of the partners involved, each
  partner really brings something of equal value to
  the table. Big mainstream credit unions should
  not be concerned about having to do more than
  their part in such a relationship. Each partner,
  small and large, brings something of value that
  creates a true sense of complementary
  competencies.
• Anita Macias, Patelco CU

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What Could Be

• CDFI Fund
• Refocusing your mission?
• Amend law to open up Bank Enterprise Awards?
• Share Insurance Fund credits for community
  development investments?

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Become a Community Development Partner!

• National Federation of
• Community Development
• Credit Unions
• 120 Wall Street, 10th Floor
• New York, NY 10005
• 212-809-1850 ext. 216 crosenthal_at_cdcu.coop

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www.cdcu.coop

• This Presentation (see Programs tab)
• Community Development Partners program
• Funding news
• Federation programs and services
• Research and Publications

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Special Thanks!

• Joan Green, PresidentSyntropy, Inc.P.O. Box
  2215Durango, CO  81302Phone 
  970.247.3416Fax      [phone]
  www.cugrants.com