WASHINGTON––The National Federation of Community Development Credit Unions and two individual credit unions are among the winners of funds in the 2016 CDFI Prize Competition, which is run by the Treasury Department’s CDFI.
In all eight organizations have won a total of $1 million to reward “innovative approaches to increasing investment in underserved rural areas, particularly those characterized by persistent poverty.
“The CDFI Fund is excited to showcase and support Prize winners that are working in underserved rural communities to develop breakthrough solutions to attracting capital investment and enhancing credit access,” said CDFI Fund Director Annie Donovan. “These are areas in deep need of innovations that combat persistent poverty. We laud the entrepreneurial efforts of Prize Competition applicants."
According to Treasury, winners of the 2016 CDFI Fund Prize Competition were selected based on their submission of innovative proposals that: (1) identify and promote new ideas and practices for implementation by CDFIs that serve rural areas, and/or (2) create value during and after the competition by encouraging CDFIs serving rural areas to develop new skills or practices that may have beneficial effects on the communities they serve.
The National Federation of Community Development Credit Unions won $300,000; while Appalachian Community FCU and Hope Credit Union each won $25,000.
Treasury said the funds awarded the Federation will support the Federation’s “CU Impact” program, which it is building to become “the first and only core system created specifically for CDFIs.”
“CU Impact will enable CDFI credit unions to interact with customers through smartphones as well as share standardized products and services designed for low-income communities with other credit unions enrolled in the system,” Treasury said. “The initiative will be piloted with Red River Mill Federal Credit Union and Shreveport Federal Credit Union, two CDFIs serving persistent poverty counties in Louisiana and Mississippi, and the Federation anticipates expanding to 30 CDFI credit unions within five years.”
Treasury said Appalachian FCU, Gray, Tenn. will use its $25,000 prize to continue to protect underserved communities in eastern Kentucky from predatory lenders while providing access to banking services to remote members.
“To reach those customers who lack proximity to a credit union branch, ACFCU will be installing three Virtual Teller Machines (VTMs) – ATM-like machines with a video screen and microphone that allow the customer to video chat with a credit union employee – in strategic locations in rural eastern Kentucky,” Treasury said. “In addition, the credit union has developed ‘myMoneyTrackSolutions,’ a stair step series of services and products that can build credit, consolidate debt, and provide affordable alternatives to predatory loan products.”
Jackson, Miss.-based Hope Credit Union, said Treasury, will use its funds as part of a strategy of taking over donated bank branches in persistent poverty counties and offering products and services appropriate to the community. “Hope’s strategy combines the donated physical infrastructure with its own robust products and services, user friendly mobile technology, and a clear commitment to community development to attract previously unbanked and underbanked rural residents into the financial mainstream,” Treasury said.