NCUA Media Advisory

Chairman Fryzel Encourages CDFI Participation

May 14, 2008, Alexandria, Va. – National Credit Union Administration (NCUA) Chairman Michael E. Fryzel encouraged broader credit union participation in Community Development Financial Institutions Fund (CDFI Fund) programs as part of his overall review of the Obama Administration’s Fiscal Year 2010 Budget.

“Credit unions are well-suited to benefit from the programs offered by the CDFI Fund.  Consistent with the focus of CDFI, many credit unions provide financial products and services to low-income, underserved, or unbanked individuals and communities,” said NCUA Chairman Michael E. Fryzel. “Through CDFI Fund funding, credit unions can increase impact in their communities and the national economy.

“Credit unions have received more than $14 million from the CDFI Fund over the past three years, and I encourage more credit unions to consider using CDFI programs to enhance delivery of financial products and services,” Fryzel said.

An overview of the CDFI Fund and its programs follows:

What is the CDFI Fund?
The Community Development Financial Institutions Fund (CDFI Fund) was created in 1994 under the U.S. Treasury Department. Its mission is to “expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States”.

What does the CDFI Fund do?
The CDFI Fund certifies and invests in financial institutions that provide financial products and services primarily to low-income communities and/or to low-income people. Through its programs, the CDFI Fund supports institutions that seek to encourage wealth-building through strategies such as business development, homeownership, providing basic banking services to underserved communities, and financial literacy. It does this by providing monetary awards through CDFI Bank Enterprise Awards and Native American CDFI Assistance (NACA) Programs as well as tax credits through the New Markets Tax Credit Program. Since created, the CDFI Fund reports it has awarded $864 million to community development organizations and financial institutions.

What is the benefit for my credit union?
Under the CDFI Program, credit unions may apply for up to $100,000 in “Technical Assistance” (TA) grant funding to build internal capacity (e.g., staff training, consultant services, technology upgrades) or to achieve CDFI certification. Certified CDFI credit unions may apply for up to $2 million in “Financial Assistance” (FA) for capitalization funds to support their overall business plan (e.g., expand to a new service area, implement a new loan program).

If you have questions about how your credit union can benefit from these programs, please refer to the CDFI Fund website at: http://www.cdfifund.gov. 

Funding increased

Through the American Recovery and Reinvestment Act of 2009, the CDFI Fund received an additional $98 million to make awards through the CDFI and the NACA Programs. Funding is also anticipated for FY 2010 programs, which is expected to be announced this fall.

What other resources does NCUA have to assist my credit union?
The NCUA’s The Resource Connection website (http://www.ncua.gov/ResourceConnection) includes additional resources available to credit unions including training announcements, funding opportunities, and profiles of successful credit union business practices.

The National Credit Union Administration is the independent federal agency that regulates charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of nearly 90 million account holders in all federal credit unions and the majority of state-chartered credit unions.

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