Revised CDFI rules a boon for credit unions in 2024
This last fall, the Department of the Treasury updated key standards and reforms to the Community Development Financial Institutions (CDFI) Fund dedicated to strengthening credit unions’ abilities to be a safe and secure financial oasis for low-income communities. This CDFI Fund Revised Application offers a designation that further solidifies the integrity of mission-driven credit unions through financial inclusion and weakens the predatory payday lenders hurting neighborhoods across the country.
Credit unions raising their game with CDFI designation
December 7, 2023, marked a pretty big milestone for certified CDFI credit unions as the Treasury offered up the new requirements following seven years of hard work, alterations, obstacles, and various objections from key industry influences to keep current credit unions from surrendering the designation. What emerged in the end is the kind of standard that will play a key role in cultivating growth by bringing the economically disadvantaged back into the credit union fold in thousands of neighborhoods across the United States.
It is for those reasons and many more that I hope to inspire and encourage your credit union to apply for CDFI certification in 2024. With these newly established application rules in place, attaining CDFI status will help your credit union fulfill its purpose to promote and take action on community development in distressed and underserved communities while opening the door to other federal resources as well as state and local governmental, charitable, and private sector investments.
In her statement of response on behalf of CU Strategic Planning, President and CEO Stacy Augustine voiced her organization’s support and pride in making the CDFI designation a beacon of hope for cooperatives and, by extension, underserved members across the country, “Our goal is to ensure credit unions retain their CDFI certification while facilitating the expansion of the powerful designation to even more credit unions nationwide. We firmly believe that every community in America deserves access to a CDFI.”
CDFI numbers speaking volumes
And it’s clear that credit unions are well on their way to that goal. For the last five years, credit unions have been the leading force in the startling growth of CDFIs, according to a study by the New York Federal Reserve in early August 2023. The study found that the number of CDFIs grew from 1,066 in 2018 – including 288 credit unions – to 1,487 CDFIs and 531 credit unions by June 2023.
That’s right: CDFI-certified credit unions more than DOUBLED between 2018 and 2023. That kind of growth and awareness shows the level of financial inclusion, education, economic relief, credit-building, and dedication to community service that the credit union movement has been universally recognized for nearly 120 years.
If you’re a credit union that is ready to level up and form a deeper, more impactful relationship with your members using enhanced services and resources, I would be happy to speak with you and discuss any questions you have. I also invite you to go right to the CDFI certification page and begin your journey to bring hope, practical solutions, and financial inclusion to the underserved people in your communities.
