6 California CUs Awarded Long-Term Secondary Capital Loans

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Vice President Kamala Harris and Treasury Secretary Janet Yellen announced $8.7 billion of capital provided to community development financial institutions (CFDIs) from the U.S. Treasury Department’s Emergency Capital Investment Program (ECIP) this week — benefitting Episcopal Community FCU, Financial Partners CU, MERCO CU, Northeast Community FCU, Orange County’s CU, and USC CU.

These six California-based credit unions were part of a larger group as the ECIP aims to support, prepare for, and respond to the economic impacts of the COVID-19 pandemic nationwide. In this week’s announcement, 84 CDFI and minority designated credit unions across the country received ECIP investments, ranging from less than $1 million to over $200 million (for a total of more than $2 billion in long-term secondary capital loans).

Announced as part of the economic stimulus package in late 2020 that allocated $12 billion in grants and investments to CDFIs and minority depository institutions (MDIs) — and as a result of Inclusiv’s intense advocacy work along with key industry partners — ECIP made available $8.7 billion to expand the capacity of these financial institutions. CDFI and/or MDI credit unions are able to meet the needs of their communities, lend deeper, and expand access to affordable, responsible, as well as sustainable financial products and services for small businesses, low-income consumers, and communities of color, who were heavily impacted by the economic downturn from the pandemic.

Since the passing of the legislation, around-the-clock support, guidance, technical assistance and advocacy was provided on behalf of credit unions — from town hall calls with Treasury Department officials to persuading the National Credit Union Administration (NCUA) to allow credit unions to accept 30-year investments.

2021 has been a historic year for CDFI credit unions: 244 received $403 million in Rapid Response Program awards in June; 13 credit unions received $2.8 million to scale up small-dollar loans and another 94 credit unions received $11.7 million in Technical Assistance grants in September; and 66 credit unions received $39 million in Financial Assistance grants in early December.

“The millions of dollars channeled to credit unions this year has almost doubled the total amount our industry has received since the inception of the CDFI Fund in 1996,” said Daniel West, vice president of social impact for the California and Nevada Credit Union Leagues. “This unprecedented amount of funding both affirms and furthers the barrier-breaking financial inclusion work that credit unions were founded to do and continue to exemplify in their communities. Congratulations to all ECIP recipients!”

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