A new study found credit unions with the Community Development Financial Institution designation tend to generate less profit than those without. However, according to the study's authors, a strong community development business model can produce not only robust profits, but also increased social returns.

Published by the Madison, Wis.-based Filene Research Institute, the study also highlighted what the authors, three executives from the Tacoma, Wash.-based consulting firm CU Strategic Planning, said was confusion inside and outside the credit union industry regarding the financial implications of community development efforts.

"These findings imply that a credit union seeking these designations should not do so with the designation as the end goal," the report read. "The process of obtaining the designation should be part of a larger plan to integrate community development products and practices into the credit union's business plan. Obtaining CDFI certification without adopting community development activities could lead to reduced profitability."