Many credit unions today are stretching to expand their community development and outreach programs. Credit unions are pursuing community development financial institution certification because of their desire to promote greater community outcomes and, of course, grant awards to fund them. However, receiving CDFI Certification and grant funding, usually up to $1 million, only scratches the surface of the potential for credit unions interested in strengthening their communities.
An example of the potential associated with being community-minded is $1.1 billion Dade County Federal Credit Union, Sweetwater, Florida. The credit union had the strategic foresight to not only pursue CDFI Certification but also to recruit a CDFI-experienced and passionate community development leader to lead its community development efforts. When the pandemic hit, Dade County FCU was ready to hit the ground running with existing partnerships, products and programs that resulted in $25 million in funding to expand inclusive, diverse and equitable lending through the Miami Dade County area. The CU calls this effort Project Rise.
What Do We Mean by ‘Community Development’?
Community development in a broad sense is a process through which community members come together to take collective action and generate solutions to common problems. In the financial services space, this often means providing access to affordable financial products and services. While such access is a staple of economically sound communities, at least a quarter of American households are unbanked or rely on costly payday lenders and check-cashing outlets. In recent years, the lack of access to capital for small businesses and other critical community development projects has also led to an increased need for alternative and reliable sources of financing.
continue reading »