WASHINGTON—Eighty-four credit unions have in total received more than $2 billion in long-term secondary capital loans from a Treasury Department program.
The funding awards were announced by Vice President Kamala Harris and U.S. Treasury Secretary Janet Yellen as part of $8.7 billion in capital to be provided to community development financial institutions (CDFIS) from the U.S. Department of Treasury's Emergency Capital Investment Program (ECIP), which aims to support, prepare for, and respond to the economic impacts of the COVID-19 pandemic.
The announcement was made during the U.S. Treasury’s Freedman's Bank Forum. The full list of credit unions that received funds can be found here. Credit union awards ranged from less than $1 million to more than $200 million.
The funding was announced as part of the economic stimulus package in late 2020 that allocated $12 billion in grants and investments to CDFIs and minority depository institutions (MDIs).
HOPE CU Receives $88 Million
Among the CUs that received funds was Hope Credit Union, a Black and women-owned CDFI in Mississippi, which was awarded $88 million. The credit union said it is the largest community development investment in the organization’s 27-year history and that it will “forever change the scale and reach of Hope Credit Union into underserved communities.”
“It is quite fitting that today’s historic announcement of the largest investment ever made in community development finance takes place at a commemoration of the Freedman’s Bank—an institution created to provide former slaves with fair access to the banking system,” said HOPE CEO Bill Bynum. “As a fellow financial first responder and longtime advocate for policies, practices and investments that level the financial playing field, HOPE looks forward to building on the Freedman’s Bank proud legacy by working to ensure that Emergency Capital Investment Program resources reach those hardest hit by COVID-19, bridge gaps in the banking system and advance equitable economic prosperity, particularly in communities of color across the Deep South.”
‘Intense’ Advocacy
In a statement, Inclusive said its “intense” intense advocacy work, as well as that of other industry partners, helped to make the funding available.
As a result, “CDFI and/or MDI credit unions are able to meet the needs of their communities, lend deeper, and expand access to affordable, responsible, as well as sustainable financial products and services for small businesses, low-income consumers, and communities of color, who were heavily impacted by the economic downturn from the pandemic,” Inclusiv said.
What People are Saying
After the announcements were made, several people within credit unions offered comment, including:
- Cathie Mahon, president and CEO, Inclusiv: “It is an honor to participate in the U.S. Treasury Freedman's Bank Forum today and to hear first-hand from Vice President Harris and Secretary Yellen the historic announcement of the ECIP recipients. This long-term investment in community development and minority designated credit unions will transform the scale and impact on low-income and historically excluded communities for generations to come. We recognize and celebrate the accomplishments of capital recipients today and pledge to support them as they leverage and deploy this capital to promote financial inclusion and equity.”
- Luis Pastor, president and CEO, Latino Community Credit Union: “This is a historic moment for our credit union and for our community. With this well-deserved transformational investment, we will be able to increase our lending and keep empowering our members to build wealth and pursue their dreams.”
- Jeff Ivey, president and CEO, River City Credit Union: “We’re honored to have been selected as part of the ECIP. The important work that CDFIs are doing on a daily basis is critical to improving the financial standing of those that are financially underserved in our country, many of whom were disproportionately impacted by COVID-19. The capital that we are receiving will enable us to expand our outreach into communities of need and do more for those we serve.”
- Alssatou Barry-Fall, president/CEO, Lower East Side People’s FCU: “This investment from the Treasury Department is a game-changer for our credit union and the low income and minority communities we serve. Historically, capital has been our biggest limitation to meet the needs of our community, and this secondary capital investment will help us expand our services and increase our lending to more business and consumers within our footprint. We’re grateful for this Administration’s commitment to community development and for Inclusiv’s leadership that was instrumental in making these resources available to us.”