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National Federation of Community Development Credit Unions

National Federation of Community Development Credit Unions. Enhancing Your Community Development Efforts Presentation by Cliff Rosenthal to the CUES CEO Network. The Federation. You do more for your members. So do we. Since 1974. Today’s Presentation.

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National Federation of Community Development Credit Unions

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  1. National Federation of Community Development Credit Unions Enhancing Your Community Development Efforts Presentation by Cliff Rosenthal to the CUES CEO Network

  2. The Federation. You do more for your members. So do we. Since 1974

  3. Today’s Presentation • Introduction to CDCUs and the Federation • Resources and Strategies • Local Partnerships • Federal/National Resources • Private Resources • Foundations • Federation • What Could Be

  4. What’s 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

  5. The Federation’s Mission Strengthen credit unions serving low-income communities.

  6. A new era in Community Development The Federation’s Community Development Partners Program • Serving low-income people is the business of all credit unions. • CDCUs + “mainstream” credit unions The Federation

  7. 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

  8. What’s a “CDCU?”

  9. What’s 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 501[c](3) charity • May be a • Comm’ty Devel.Financial Institution (CDFI) • Low-income credit union (LICU)

  10. 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%

  11. What are Resource-Building Strategies? • Local Partnerships • Federal resources • Private resources • Foundations • The Federation • Community Development Partners • Bridge Grants program

  12. Local CDCU Sponsors & Partners • Churches & Faith-based orgs. • Community Development Corps. (CDCs) • Housing organizations • Other nonprofits • City government

  13. 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: AmeriCorps*VISTA (through Federation)

  14. 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

  15. Federal Resources • Individual Development Accounts: Dept. of HHS (“AFIA” program) • IRS: partnership for Volunteers in Tax Assistance (VITA), EITC

  16. 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)

  17. 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

  18. 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.

  19. Federal Resources: Restricted Low-income Designation orCDFI designation is required for: • NCUA Community Development Revolving Loan Program • Community Development Financial Institutions (CDFI) Fund (Dept. of the Treasury)

  20. 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

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

  22. National Credit Union Foundation • Callahan Fund • Cooperative development • Shared branches • Hispanic outreach • Geographical expansion to underserved • Financial literacy • Individual development accounts

  23. 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

  24. 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

  25. 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)

  26. 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

  27. Bridge Grants • Program funded by Ford Foundation through Federation • Why Ford funded • Desired outcomes • Winning proposals: what we learned

  28. 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

  29. 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”

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

  31. 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)

  32. 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

  33. 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

  34. 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

  35. Bridge Awards: CUSO to reach Latino & Immigrant Market OAS Staff FCU/IDB-IIC FCU and District Gov’t 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

  36. Bridge Awards: CUSO to provide multi-cultural/multilingual 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

  37. 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

  38. 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

  39. The Bridge Grants Program • What We’ve 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)

  40. “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

  41. What Could Be… • CDFI Fund • Refocusing your mission? • Amend law to open up “Bank Enterprise Awards”? • Share Insurance Fund credits for community development investments?

  42. 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@cdcu.coop

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

  44. Special Thanks! • Joan Green, PresidentSyntropy, Inc.P.O. Box 2215Durango, CO  81302Phone:  970.247.3416Fax:      970.385.0421 www.cugrants.com

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