WASHINGTON–While “traditional banks and credit unions wage fierce battles over market share, tax status, and a host of regulatory issues,” Inclusiv has issued a statement that CDFI banks and CDFI credit unions are working together to combat poverty.
Inclusive noted that in U.S. Treasury Department’s announcement that $25.2 million in Bank Enterprise Awards (BEA) by its Community Development Financial Institutions (CDFI) Fund, 38 banks certified as CDFIs received awards for their efforts to channel $19.4 million of deposits into 18 CDFI credit unions to support their lending in distressed communities.
“In 2016, the Community Development Bankers Association and Inclusiv began working together to play matchmaker between CDFI banks participating in the BEA Program and CDFI credit unions,” Inclusiv said in a statement. “Using the online CapNexus platform hosted by Partners for the Common Good, CDFI banks are able to find CDFI credit unions seeking deposits.”
The BEA Program provides incentives for banks to lend to and to provide services in communities with high poverty (30%+) and high unemployment (at least 1.5 times the national unemployment rate) and to support CDFIs lending in these areas, noted Inclusiv. This year, the CDFI Fund released details on the support provided by CDFI banks to other CDFIs – the vast majority of which were CDFI credit unions.
Committed to ‘Positive Change’
“Our member banks are committed to creating positive change in the poorest parts of the United States,” said Jeannine Jacokes, CEO of the Community Development Bankers Association, in a statement. “So, working with Inclusiv and CDFI credit unions serving similarly distressed communities was an easy fit because it is in everyone’s best interest.”
Added Cathie Mahon, CEO of Inclusiv, “Channeling bank deposits into community development credit unions enables us to together reach underserved consumers and communities with safe, responsible and affordable financial products and services. In the communities we collectively serve, our competitors are payday and other predatory lenders, not each other. Together we are rebuilding financial stability in American communities and providing pathways from poverty. The BEA program helps to recognize and to advance this critical work.”