CA CUs Net $20M in COVID Relief; Others Could be Eligible

Daniel West, Vice President of Social Impact for the California and Nevada Credit Union Leagues
Daniel West, Vice President of Social Impact for the California and Nevada Credit Union Leagues

This past year has shown credit union leaders the importance of financial wellness, a founding principal in the credit union movement. This has been most apparent in low-income communities, many of which were shell-shocked by economic instability caused by the COVID-19 pandemic.

According to a May 2020 report published by the Urban Institute, about half of low-income households have faced unemployment (including some level of financial hardship) as a result of COVID-19 (see "Parents Are Struggling to Provide for Their Families during the Pandemic"). However, only about one-third of higher income households reported facing those same hardships.

As regions across California and Nevada look to recover from the financial impact of COVID-19, credit unions certified as Community Development Financial Institutions (CDFIs) will be essential to ensuring low-income communities have access to the capital they need to thrive. On June 15, The CDFI Rapid Response Program (RRP) awarded $1.25 billion in much needed COVID-19 relief funds to CDFIs across the nation, thanks to funds provided by the U.S. Treasury Department. Of the 863 CDFI organizations receiving funding, 244 credit unions received $401.8 million in awards ($20.7 million of which were to 13 credit unions in California).

It comes as no surprise that credit union leaders in California heard the call and stepped up to be the backbone their communities need during this period of uncertainty. CEOs such as Shruti Miyashiro (Orange County’s CU), Carrie Birkhofer (Bay FCU), Nader Moghaddam (Financial Partners CU), Keith Sultemeier (Kinecta FCU), Daniel Rader (SCE FCU), and Barry Nelson (Travis CU) understood how certifying their intuitions as CDFIs well ahead of time would not only grant their credit unions access to future additional capital, but more importantly allow flexibility to respond to members’ needs in times of crisis.

Bay FCU, Financial Partners CU, First Imperial CU, Kinecta FCU, MERCO CU, Orange County’s CU, Santa Cruz Community CU, SCE FCU, Travis CU and Tucoemas FCU each received $1.8 million in Rapid Response Program awards. Cooperative Center FCU, Episcopal Community FCU, and Northeast Community FCU received $1.2 million, $250,000, and $943,000 respectively. Congratulations to all award recipients!

As the second largest recipient of awards, receiving more than 30 percent of total RRP funds, CDFI-certified credit unions are positioned to respond directly to the individual needs of low-income communities across the nation. However, As COVID-19 pandemic relief funds eventually dry up, socially responsible investments in low-income communities will continue as a strategic priority for the government and private investors alike (read "Comcast Advances Economic Mobility and Racial Equity in Underserved Communities Through $10 Million Investment With Inclusiv"). Certified CDFIs will be the vehicle through which those funds will be directed.

The California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) lobby Congress annually for expansion of CDFI funds and the Community Development Revolving Loan Fund. Each year these funds receive roughly $200 – 300 million, which seems small compared to the $12 billion approved this past December.

The National Credit Union Administration’s (NCUA) Office of Credit Union Resources and Expansion also offers technical assistance grants to aid credit unions looking to expand into the CDFI space. Awards and applications for technical assistance grants are ongoing with a window about to close. There is no better time than NOW to begin the CDFI certification process.

To learn more about CDFI eligibility, CDFI Fund Programs and the certification process, check out the CDFI Fund website here.

Need Help with CDFI Eligibility?
Need help? Daniel West is the Leagues new vice president of social impact! He will serve as a resource for members and help credit unions increase their corporate social responsibility footprint within the communities they serve. Email Daniel at danielw@ccul.org.

With a special emphasis in increasing financial services and wellness in historically underbanked and underserved communities, Daniel is available to help member credit unions leverage a variety of federal and state funding sources/programs meant to support this work — including, but not limited to: grant writing, program planning/implementation, and other technical assistance as needed.

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