The NCUA and the U.S. Treasury Department’s Community Development Financial Institutions Fund signed an agreement Thursday that will streamline the application process for low-income credit unions to become certified as community development financial institutions. 

Credit unions that obtain CDFI certification can access training and competitive award programs provided by the CDFI Fund, and the resources can aid their capacity to provide underserved communities with access to safe and affordable financial services. 

“This memorandum of understanding opens up enormous possibilities for credit unions,” Chairman Debbie Matz said. “By facilitating the CDFI application process and, ultimately, increasing  the number of certified CDFI credit unions, we’re laying the foundation for greater access to affordable financial services and more investment in local communities. This will help credit unions better serve members and communities that have been difficult to reach, and that will help more people build wealth and more secure financial futures for themselves and their families.”

CDFIs nationwide are making a real difference in low-income communities by providing consumers with safe and affordable financial services and by providing neighborhood businesses with access to capital, CDFI Fund Director Annie Donovan said.

“Many low-income credit unions are already performing this important work, but need more support. By partnering with (the) NCUA to increase the number of credit unions certified as CDFIs, we will not only expand access to the CDFI Fund’s programs but also reach more unbanked and underbanked individuals," she said.

The two organizations launched a plan with a goal of doubling the number of certified CDFI credit unions by the end of 2016. There are currently 295 credit unions certified as CDFIs. The majority of these also hold NCUA’s low-income credit union designation.

Increasing the number of certified CDFI credit unions could significantly expand funding that could be used to offer financial services to underbanked low-income individuals and make investments in local businesses, affordable housing and community facilities, the NCUA said.

The move produced praise from NAFCU.

“We appreciate the collaborative efforts of NCUA and the CDFI Fund to help make it easier for credit unions to access CDFI funds and resources in order to better serve the financial needs of low-income and underserved communities,” President/CEO Dan Berger said. “Credit unions, as not-for-profit, member-owned financial cooperatives, are uniquely well-suited to fill the financial services needs of these communities.” 

CUNA also supported the action.

"We applaud the efforts of (the) NCUA and U.S. Treasury to double the number of CDFI certified credit unions in 2016. The funding and technical assistance made available will help these credit unions better serve their members, strengthening the community commitment they are able to make," Chief Advocacy Officer Ryan Donovan said.