Less Money Available, But Four CUs Win CDFI Funds
There was less money to go around this year but four credit unions were named last week as grant recipients from the U.S. Treasury Department's Community Development Financial Institutions Program.
The CDFI Program awarded a total of $23 million in financial assistance to 34 institutions, down sharply from last year when 148 institutions received $51 million, including $4.7 that went to 23 credit union organizations.
Despite lower funding levels this year, Tony Brown, director of the CDFI program, insisted the program is continuing to grow, mainly through the $32 billion or so of tax credits to be awarded under the New Markets Tax Credits Program.
Brown touted the role credit unions have played in the CDFI Program. "Credit unions are very important to the program, they represent about 20% of all certified CDFIs," Brown said. "They have exhibited a wonderful delivery system for serving the unbanked and underserved communities, as well as a willingness to embark on financial literacy programs. And now they are expanding their efforts to provide microlending to small businesses in some of these communities."
Since its inception eight years ago, credit unions have played a major role in the CDFI Program, with more than 50 credit unions or credit union organizations receiving about $35 million in grants, loans and capital infusions.
This Year's Recipients
This year recipients include: Latino CU, Durham, N.C., which received $700,000 to fund a mortgage program for Latino immigrants; People's Community Partnership FCU, Oakland, Calif., which received $149,500 to market to and provide financial services to the community's minority neighborhoods; Little Haiti-Edison FCU, Miami, $120,000 to provide loan capital to microbusinesses in the Haitian community; and Tri-Valley Community FCU, Helena, Mont., $73,500, to help fund mortgage loans in rural Townsend County, Mont.
The last three of these awards are being targeted at so-called "hot zones," economically depressed areas to which the CDFI Program has given priority.
The CDFI Program, a creation of the Clinton administration, has been targeted for cutbacks by the Bush White House. Funding this year for the entire program was slashed to $72 million from a high of $125 million four years ago, and the Bank Enterprise Awards component of the program is being targeted for elimination.
But Brown was optimistic the program will continue to thrive. The House has approved a further reduction in spending next year to $57 million, but Brown thinks that the funding will be higher, in a compromise with the Senate's $70 million figure. He said that he was also confident the BEA component of the program will survive.