The success of infusing financial inclusion and health opportunities into the United States’ low-income designated credit unions continue with the announcement of the NCUA’s Community Development Loan Fund grants!
The beginning of September 2022 saw the National Credit Union Administration (NCUA) award more than $1.5 million in Community Development Revolving Loan Fund grants to 90 low-income designated credit unions. The funds are earmarked to expand outreach to underserved communities, participate in mentoring relationships, receive training, and improve digital services and security.
The NCUA announced the organization awarded grants ranging from $1,400 to $50,000 to credit unions in 43 states, including the District of Columbia. In total, 28 credit unions were designated first-time grant recipients while 16 cooperatives were minority depository institutions (MDIs), according to the NCUA.
“Low-income credit unions are on the frontlines of expanding access to safe, fair, and affordable credit, and these grants to credit unions will allow those institutions to expand services, build capacity, create professional support networks, and bolster their capacity to withstand cyberattacks,” said Todd Harper, NCUA Chairman. “Again this year, we have seen the need far exceed our available resources, so I am very pleased that Congress is considering increasing the annual allocation. With more money, the NCUA will be able to make more grants and bigger grants through the Revolving Loan Fund.”
The NCUA announced the CDRLF awards in four categories:
- Digital services and cybersecurity: 52 grants totaling $484,165
- Small Low-Income Credit Union (LICU) mentoring: 3 grants totaling $75,000
- Underserved outreach: 21 grants totaling $943,488
- Training: 14 grants $64,510
During the 2022 grant round, the NCUA gathered 220 grant applications totaling in excess of $4.7 million, according to the agency.
Giving low-income credit unions the resources to succeed
Thanks to agencies like the NCUA and the fund programs they provide, credit unions nationwide are able to level up financial health and wellness opportunities for their members. They use those funds to build out all manner of member programs including a wide range of financial counseling and classes to help individuals and families find their way back on the path to financial wellness and financial freedom.
Because of these CDRFI grants, low-income credit union communities and their members can now benefit from such financial literacy and education concepts as:
- How credit works, or how to repair it
- How to create and keep a budget
- Learn about responsible lending
- Understand interest rates and know what lending sources to avoid
- Retirement planning
- Money management
- Saving concepts
As mentioned in the list above, credit unions are an excellent source of safe and responsible local lending services, as opposed to more stingy banks and financially-unhealthy, risky, and intrusive predatory payday lenders so prevalent around the country. Many credit unions will offer small dollar loans during times of financial and economic crisis, especially if they expand their product offerings to include mobile fintech like the QCash CUSO Life Event Loan solutions.
Additional reasons members choose small dollar lending solutions with a credit union over other financial institutions and businesses include:
- Localized reputation
- Personal, member-oriented service
- Local expertise
- More affordable services due to member-ownership reinvestment
- Increased investment in mobile fintech partnerships
The NCUA’s CDRLF grants provide credit unions many financially-inclusive avenues to enhance their communities’ wealth in financial literacy and education opportunities, along with practical steps to build up their collective economy. And with the investment in and consistent marketing of a robust, accessible, and affordable small dollar lending program, the credit union movement can only continue to build upon the hopes and goals of members in those up-and-coming neighborhoods!
QCash CUSO is continuing its push to become the leader on accessible and affordable small dollar lending for credit unions. Feel free to follow us on social media on LinkedIn and Twitter to keep an eye on the latest small dollar lending and credit union industry news!