The National Federation of Community Development Credit Unions has joined with two other community development institutions to hail some recent trends in the field.
The National Federation, Social Investment Forum and Green America cited rising participation from consumers, heightened interest among investment firms and growing awareness of community investing successes as reasons community investment is expanding.
The institutions defined community investing as "capital from investors and lenders that is directed, typically via community development financial institutions (CDFIs) and other community investing institutions, to communities and individuals that are underserved by traditional financial services." And it reported that assets in community investing institutions grew 60% from $25 billion in 2007 to $41.7 billion as of the start of 2010, the most recent date for which data had been reported.
National Federation CEO Cliff Rosenthal argued that the increased attention was arriving at a crucial time as CDCUs have needed to make more of the work better known.
"Credit unions, and CDCUs in particular, have long focused their services to disadvantaged populations," Rosenthal said. "This is exactly why the first credit union in America was founded more than 100 years ago, to provide French-Canadian immigrants with opportunity. This is still what many credit unions are all about, but given the challenging economic times, many are finding it difficult to stay in business," he said, adding that some of the leaders who need convincing are at the helms of other credit unions.
"While some, even in our own industry, criticize small credit unions as lacking a competitive advantage, we have many member CDCUs that operate as the only regulated financial institution in some of America's poorest communities. If they go, only the predatory check cashers, payday lenders and pawn shops will remain to fill the void, and for those of us in the CDFI community, this is simply not acceptable," he emphasized.
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