NEW YORK–There are a total of 416 community development financial institution (CDFI) credit unions in the U.S. as 2021 comes to a close, the highest number in history, according to Inclusiv.
In a year-end summary, Inclusiv said the number of CDFI CUs represents a 25% growth from one year earlier.
In addition, many of these newly certified credit unions are minority designated credit unions or minority lenders, such as the financial cooperatives from Puerto Rico that “serve communities most impacted by the economic contraction caused by the pandemic,” the organization reported.
Prior to 2018, there were zero CDFI credit unions in Puerto Rico. Today, there are 65 CDFI-certified financial cooperatives, or cooperativas, Inclusiv stated.
According to Inclusiv, for the first time, regulated financial institutions including credit unions, banks, and depository institution holding companies now make up the majority of the CDFI industry, at 55%.
Credit unions now represent a third of the CDFI industry, serving more than 16-million predominantly low income consumers and communities of color, Inclusiv added.
Direct Support
“To obtain their certification, many of these newly certified credit unions received direct support from Inclusiv, the official credit union representative within the CDFI industry,” Inclusiv said. “The majority of CDFI-certified credit unions are Inclusiv members, a recognition of the work the network has done on behalf of all CDFI credit unions since the establishment of the CDFI Fund in 1994.”
According to Inclusiv, community development credit unions (CDCUS) have been delivering targeted relief to communities in distress on a “massive scale” since they were founded.
“During the economic downturn following the COVID-19 pandemic, they served as financial first responders, filling in gaps in hardest hit communities and facilitating stimulus dollars to reach people and businesses that needed it the most,” Inclusiv said. “In acknowledgement of this role, particularly in connection with the billions of dollars in Paycheck Protection loans that CDCUs provided, Inclusiv worked with legislators to include an unprecedented $12 billion in funding to CDFI credit unions in the CARES Act from December 2020.”
In June 2021, Inclusiv noted 244 credit unions received $403 million in Rapid Response Program awards, 13 credit unions received $2.8 million to scale up small dollar loans, 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 and 85 credit unions received over $2 billion from the Emergency Capital Investment Program (ECIP) in December.
A Doubling of Funds
The millions of dollars allocated to credit unions this year have almost doubled the total amount our industry has received since the inception of the CDFI Fund in 1996, Inclusiv said, adding “this historic amount of funding both affirms and furthers the barrier-breaking financial inclusion work that credit unions were founded to do.”
“The Inclusiv mission of advancing people and communities historically underserved by the financial mainstream is achieved day-in and day-out by CDFI credit unions,” said President and CEO Cathie Mahon. “We are incredibly proud of the number of credit unions who have sought and gained CDFI certification, with our support and that of partners such as CUNA Mutual Group, as well as policymakers. Community development credit unions can utilize their CDFI certification to build economic stability and prosperity in their communities, delivering safe, affordable, and accessible products and services to people who are traditionally underserved.”