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Applying for Community Development FI Certification Becomes Easier
Monday, October 24, 2016 6:50 AM

Cornerstone encourages eligible credit unions to apply through streamlined process

Low-income credit unions in Arkansas, Oklahoma, and Texas, who are eligible to be certified as Community Development Financial Institutions may be able to take advantage of a new streamlined application process.

Representatives of NCUA’s Office of Small Credit Union Initiatives are contacting low-income credit unions that are not yet CDFI-certified but that could be eligible for the streamlined application process. NCUA can do much of the required pre-qualification work, using existing AIRES data.

"NCUA’s new streamlined CDFI application process will simplify a once-difficult task for those credit unions seeking this certification," said Lorri Gaither, Cornerstone's VP small credit union development. "Once credit unions are certified, they will have access to multiple funding opportunities to help them better serve those underserved markets."

CDFI certification is determined by the Community Development Financial Institutions Fund, a division of the U.S. Department of the Treasury. The program gives certified credit unions more tools to further local economic development. A CDFI-certified credit union becomes eligible to apply for multiple programs offered by the CDFI Fund, including direct funding through awards or grants. 

For CDFI credit unions, this could mean access to five-, six-, or even seven-figure grant awards that can be used to grow capabilities and further their mission to serve members and serve their community. CDFIs also can take advantage of technical assistance, training, and capacity-building initiatives to support their missions.

"Many CDFI credit unions have been successful in receiving grant funds by utilizing the National Federation of Community Development Credit Union's consulting and fee-based grant-writing assistance for technical and financial assistance awards," said Gaither.

Case in point, Kerr County Federal Credit Union obtained CDFI certification that allowed them to receive two grants totaling more than $1.8 million. "This money allowed us to grow our assets rapidly while waiting on earnings to catch up. You can leverage it 7 to 1," said Kerr County CEO Sandy Lumbley. "We had been experiencing major growth and would have fallen below the magic 7 percent capital threshold and would have been headed for Prompt Corrective Action (PCA). In going through the certification process, it made us realize how many people in our field of membership were in a low-income area, and it helped us focus on making sure we were providing affordable services to all. The CDFI certification is a great tool."

Last year, the CDFI Fund funded more than $200 million in grants and awards, with just over $31 million going to CDFI-certified credit unions. The more credit unions that become CDFI-certified and successfully apply for available funding, the more available CDFI Fund dollars can flow into credit unions and help them improve their members’ financial lives.

Working with NCUA assistance, interested and eligible credit unions will still be responsible for completing the few remaining data requirements and for directly submitting their applications to the CDFI Fund. However, NCUA can save these credit unions time in the process by providing many of the necessary data points.

Has your credit union been contacted? NCUA Resources Now Available
Several online resources are available to help you learn more about the new process and CDFI certification. They are:

"We are very excited about the new streamlined process that makes the application easier for credit unions to apply," said Cornerstone Credit Union League Executive Vice President Karen Hart. "This is a great opportunity for credit unions to receive grants that help you serve your community. We encourage eligible credit unions to take advantage of this new process."