This week, NextCity examined the impact of the certification of credit unions as Community Development Financial Institutions by the National Credit Union Administration (NCUA) and the U.S. Treasury's CDFI Fund.
Oscar Perry Abello, reporting for NextCity writes, "The NCUA, the federal agency that regulates and insures credit unions, announced the streamlined process a year ago in partnership with the CDFI Fund, the U.S. Treasury program that certifies CDFIs and provides a range of programs to support their work in distressed urban and rural communities across the country. Under the agreement, the NCUA uses data it collects anyway as a regulator to identify credit unions that would be eligible for CDFI certification. The two top-level CDFI qualifications are 60 percent of lending targeted to low- to moderate-income households or communities, and some way of maintaining accountability to the target market. As member-owned and member-governed institutions, credit unions easily meet the accountability qualification, so it’s mostly about identifying which credit unions have a membership that meets the target market requirement. In the past year, NCUA identified around 500 credit unions that met the CDFI target market requirement and notified them of their preliminary CDFI certification...
'More CDFI-certified credit unions makes the industry stronger overall. The certification process itself, even the streamlined version, helps smaller institutions think more strategically about product development and membership growth,' says Martha Ninichuk, director of the NCUA’s Office of Small Credit Union Initiatives."
Read the full article here.