The Community Development Financial Institutions (CDFI) Fund would receive a healthy five percent increase in funding, or $17 million, in 2024, thanks to the Biden administration’s proposed $6.9 trillion proposed budget.
The CDFI Fund’s mission is to lift up “historically underserved and predominantly low-income communities access to credit, capital, and financial support to grow businesses, affordable housing, and reinforce healthy neighborhood development.”
Over 480 credit unions are represented out of the 1,396 total CDFI financial institutions (as of February 13), representing the largest type of depository institution in the United States. Forty percent of QCash clients, in fact, are CDFI-certified.
The full 184-page proposal also incorporates some additional financing support for the Fund.
“To better address the shortage of long-term affordable credit for development projects in disadvantaged communities and unlock up to $500 million in financing support, the Budget also includes a $10 million subsidy for the CDFI Fund’s Bond Guarantee Program,” the Budget stated.
By providing guarantees of bonds issued by certain bond issuers, the CDFI Bond Guarantee Program injects new and substantial capital into our nation’s most distressed communities. CDFIs can benefit from the potential scale of the CDFI Bond Guarantee Program, which provides long-term credit at below-market interest rates. Through the CDFI Fund, the program marks a pioneering effort to accelerate economic revitalization in communities across the country.
Why this increase to the CDFI Fund matters to your credit union
There are nearly countless reasons, reasons we can’t even predict, why CDFI status offers hope and a solid future to credit union members everywhere. Each member is different – each member has their own stories and everyday challenges. But they can only benefit from such programs if the cooperatives themselves are part of the national funding initiatives that enable them to achieve their life’s potential.
CDFI certification allows credit unions to become eligible for CDFI Fund training and competitive awards programs that will enhance their ability to provide access to insured, affordable financial services in the local neighborhoods and communities in which they are located. Not only do CDFIs provide financing, they also offer development services to assist borrowers in planning and managing long-term success.
These certified CDFIs are now eligible to apply for numerous awards through a diverse array of programs through the CDFI Fund. Stepping Stone Community FCU CEO Blanche Jackson noted in Cooperative Credit Union Association (CCUA) that “[SSCFCU] found it important to become of CDFI because the CDFI affords us the opportunity to apply for CDFI funding to continue our mission of offering much needed financial services to our community which in turn allows us to help improve our members’ lives.”
Greylock Federal Credit Union President and CEO John Bissell highlighted the impact CDFI certification has had on his local Massachusetts community.
“As we built friendships with other credit unions across the country dedicated to achieving financial inclusion, we realized CDFI credit unions were able to develop a special toolkit to support the needs of low-to-moderate income households, immigrants, and communities of color. These demographics represent a majority of Greylock’s rural FIeld of Membership, and since we secured our CDFI certification in 2015, we have been able to secure $3 million in grants to help boost our coaching, lending and financial service delivery across our community. We are also grateful to be plugged into a network of other CDFIs who share best practices.”
QCash’s synergy with our nation’s CDFIs and the shared mission of greater accessibility and affordability of financial services and assets on behalf of the underserved and low-income individuals and households is permanent and greatly valued. And according to a Bankrate survey, we need CDFI-certified credit unions as much as ever:
- 64 percent of U.S. adults still living paycheck-to-paycheck
- 68 percent of U.S. adults wouldn’t be able to cover expenses if they lost their jobs today
- One in four survey respondents claimed they would be forced to put an unexpected $1,000 expense on a credit card and pay it off over time – and that’s WITHOUT losing their job
There are a lot of hardworking people out there – even those who aren’t necessarily in imminent financial distress – who still find themselves with more month than money. There are credit score-saving relief solutions out there, and credit unions – particularly local CDFIs – have resources like the QCash Life Event Loan to help members bridge their finances to pay day, finance that electricity bill that’s been haunting them for months, or get near-instantaneous funds deposited in their account to pay for the tow truck and repair while they wait on the side of the freeway.
QCash would like to partner with your cooperative to bring hope, instant financial accessibility, and ultimately financial wellness to each and every one of your members in every community you serve so diligently and faithfully.
To help move you along the path to adopting and updating your core with digital transformation solutions like QCash, in association with CUNA Strategic Services we have a panel of guests including Alison Carr, CSO, from Your Credit Union Partner, to offer an impactful CDFI webinar on May 23 titled “How NASCAR and Driving Financial Inclusion Intersect”. This webinar will focus on how CDFI certification integrates into the larger strategy of multiple credit unions, and how QCash fits into that picture. More details to come!
We also invite you to visit our website, look around, and request a demo of our patented relational-underwriting solution that gives members a near-instant, 360-degree evaluation – with no credit check – and account deposit of requested funds.
Digital transformation of the financial services industry is underway, and we wish for you to be a part of it. We hope to speak with you soon!