While traditional banks and credit unions wage fierce battles over market share, tax status, and a host of regulatory issues, CDFI banks and CDFI credit unions work together to combat poverty.
On Wednesday, September 18, 2019, the U.S. Treasury Department announced $25.2 million in Bank Enterprise Awards (BEA) by the US Treasury Department’s Community Development Financial Institutions (CDFI) Fund. One of the great success stories of the announcement was news that 38 banks certified as CDFIs received awards for their efforts to channel $19.4 million of deposits into 18 CDFI credit unions to support their lending in distressed communities.
In 2016, the Community Development Bankers Association and Inclusiv began working together to play matchmaker between CDFI banks participating in the BEA Program and CDFI credit unions. Using the online CapNexus platform hosted by Partners for the Common Good, CDFI banks are able to find CDFI credit unions seeking deposits.
The BEA Program provides incentives for banks to lend to and to provide services in communities with high poverty (30%+) and high unemployment (at least 1.5 times the national unemployment rate) and to support CDFIs lending in these areas. This year, the CDFI Fund released details on the support provided by CDFI banks to other CDFIs – the vast majority of which were CDFI credit unions.
“Our member banks are committed to creating positive change in the poorest parts of the United States,” stated Jeannine Jacokes, Chief Executive Officer of the Community Development Bankers Association. “So, working with Inclusiv and CDFI credit unions serving similarly distressed communities was an easy fit because it is in everyone’s best interest.”
“Channeling bank deposits into community development credit unions enables us to together reach underserved consumers and communities with safe, responsible and affordable financial products and services,” notes Cathie Mahon, Chief Executive Officer of Inclusiv. “In the communities we collectively serve, our competitors are payday and other predatory lenders, not each other. Together we are rebuilding financial stability in American communities and providing pathways from poverty. The BEA program helps to recognize and to advance this critical work.”
For more information about the BEA announcement:
https://www.cdfifund.gov/
For more information about participating CDFI banks and credit unions:
https://www.cdfifund.gov/