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“This is an historic opportunity for Community Development Credit Unions to access flexible capital to support households in reducing energy cost burdens and preparing for climate events. The Greenhouse Gas Reduction Fund will enable community lenders to create and scale programs to help their members to upgrade to energy efficient appliances, purchase electric vehicles, invest in heating\cooling systems, and access solar either directly on their homes or through community solar projects. It also provides opportunities to invest in and support green businesses in low- and moderate-income communities and communities of color, creating jobs and opportunity in the greening economy.” – Cathie Mahon, President/CEO of Inclusiv

The Greenhouse Gas Reduction Fund is a crucial step forward to address the climate crisis. This Fund has the potential to support deeply needed projects that will reduce energy cost burden, increase climate resiliency, and expand energy efficiency and renewable energy efforts. Inclusiv will continue to work with the many organizations and allies with the experience and expertise to implement this Fund to ensure that capital will be channeled to organizations on the ground that are best positioned to meet local needs.

The Greenhouse Gas Reduction Fund’s success will be measured, in part, by its success in meeting the goals of the Justice40 Initiative, that is, whether 40% of the benefits of the Fund flow to historically disinvested and pollution-burdened communities. Indeed, it is critical that these investments not only reach, but prioritize people and communities most affected by the climate crisis, which are often the same people and communities who have been shut out of the mainstream financial system by redlining and other discriminatory practices. CDCUs, MDIs and CDFIs, which specialize in serving the people and communities mainstream financial institutions fail to serve, must play a leading role in ensuring this historic investment in climate finance is deployed successfully.

In just the last two years, Inclusiv’s Center for Resiliency and Clean Energy in partnership with the Carsey School of Public Policy’s Center for Impact Finance at the University of New Hampshire has trained 170 community-based financial institutions across the country in green lending, building capacity and infrastructure to meet the renewable energy, energy efficiency, resiliency and other climate finance needs of communities hardest hit by climate change. Inclusiv’s research shows more than 439 community-based lenders already offer or are actively developing green lending products and serve all 50 states, Washington DC, and Puerto Rico. These lenders collectively manage over $461 billion in community-owned assets and a sample of just 56 of these lenders reported investing a cumulative $2.7 billion in green projects over the last five years. Many of the lenders in this group offer dedicated green loan products for low- and moderate-income communities and communities of color. In addition to their deep impact, these community-based lenders are typically able to leverage public investment more than tenfold, putting the potential scale of financing for clean energy and climate resiliency from the Greenhouse Gas Reduction Fund at more than $200 billion.

Dozens of Inclusiv’s members are already successful green lenders that serve the most climate vulnerable communities, and are ready to deploy these critically-needed funds in their communities.

“Our Cooperativa, Jesús Obrero, is part of the critical infrastructure of our community in Puerto Rico. In the event of a natural disaster, we are poised to step in and provide alternative power, access to water, and emergency financing to those who need it. The Greenhouse Gas Reduction Fund means we will be able to expand our support to LMI communities across Puerto Rico and accelerate life-saving solar projects throughout the island.” – Aurelio Arroyo, Executive President of Cooperativa Jesús Obrero in Puerto Rico

“Clean Energy Credit Union is using the proven cooperative business model of credit unions to provide affordable clean energy financing to the entire country. Our mission is to provide loans and services that enable everyone to participate in the clean energy movement. The funds available through the Inflation Reduction Act will further help us address the high energy burden faced by low-to-moderate income, Black, Indigenous, and communities of color across the U.S.” – Terri Mickelsen, CEO of Clean Energy Federal Credit Union in Colorado

“MariSol Federal Credit Union is a CDFI that serves the low- and moderate-income regions around Phoenix, 45% of our membership is Hispanic. We deeply believe that solar fits into our mission of offering our members equitable financial solutions, and it’s clear that low- and moderate-income members of our community need better access to fair solar lending. We have partnered with nonprofit organizations, such as Solar United Neighbors, to develop solar financing that brings the environmental, health, and economic benefits of this technology to our community. The historic climate financing, made possible through the Inflation Reduction Act, will expand this access by enabling us to lower the costs of our solar loans even further.” – Robin Romano, CEO of MariSol Federal Credit Union in Arizona

“As a CDFI, Minority Depository Institution, low-income and Juntos Avanzamos credit union, our members have been left behind in the clean energy transition and disproportionally affected by climate change. We have recently launched a green loan product designed to address this by bringing low-cost clean energy and low-emissions vehicle financing to the low- and moderate-income communities surrounding USC’s campus in Los Angeles. Support from the Inflation Reduction Act will be key to helping us build this program.” – Gary Perez, President, and CEO of USC Credit Union in California

Credit unions are ready to help the Greenhouse Gas Reduction Fund meet its Justice40 goals. All credit unions are member owned and governed and exist to meet the savings and credit needs of the communities they serve. Community development credit unions expand on this work to create economic opportunity and support their members who are often low-income, immigrants, and/or people of color in building assets. Indeed, low-income credit union members themselves are the collectively the largest social impact investor as billions of dollars in member deposits in community development credit unions and other community-based financial institutions are leveraged into loans that spur development in their communities. The Greenhouse Gas Reduction Fund can support credit unions in fulfilling their mission of financial inclusion while also creating broader community benefits by reducing pollution, catalyzing the development of green jobs, and helping people update their homes to save money on utility bills and increase energy resiliency in the face of future disasters.

Given the clear alignment between the goals of the Greenhouse Gas Reduction Fund and the credit union movement’s long history of serving communities that have been excluded from the mainstream financial system, we look forward to working with the Environmental Protection Agency to ensure that the Fund program rules and guidelines channel capital to lenders, like credit unions, that are inclusive, diverse, and accountable to the communities most negatively impacted by pollution and climate change.