LOS ANGELES, Calif.–USC Credit Union has developed several green lending products aimed at helping members make emission-reducing energy upgrades more equitable for communities near the University of Southern California campus in South Los Angeles and East Los Angeles, according to a new report.
The initiative is being driven in part by the 2021 Inflation Reduction Act (IRA), which included the Greenhouse Gas Reduction Fund and which allows the opportunity for CDCUs and CDFIs (of which USC CU is one) to take on more risk as part of broader efforts to bring energy-saving initiatives to a broader market, noted Next City in its reporting.
The Greenhouse Gas Reduction Fund has some $27-billion available, including for grants to support the financing clean energy and climate projects that reduce greenhouse gas emissions.
The Next City report pointed to a 2021 study on U.S. solar adopter patterns from Berkeley Lab and the U.S. Department of Energy that found solar adopters have an annual median solar adopter income of about $113,000, while the overall U.S. median income was $64,000.
‘Many Left Behind’
“Many USC Credit Union (members) have been left behind by traditional financial institutions, disproportionately impacted by climate change, and underserved due to a lack of accessibility for Hispanic and immigrant populations,” according to Next City.
These three factors highlight an opportunity for CDFIs to meet the intersectional need for green lending in low-income Hispanic communities, the report added.
“South Los Angeles in East Los Angeles are now primarily Latino communities,” Gary Perez, CEO of USC Credit Union, told the publication, noting the $742.2-million credit union looked to Inclusiv and its Juntos Avanzamos program for direction in the markets.
Juntos Avanzamos is a designation for credit unions committed to serving Hispanic and immigrant consumers. USC Credit Union became a designated Juntos Avanzamos CDCU, which was created by Inclusiv, a CDCU membership organization and CDFI intermediary.
Building Loan Loss Reserves
Next City reported that coupled with accessibility tailored to the Latino community, grant funding from the Greenhouse Gas Reduction Fund will allow USC Credit Union to take on even more risk and grant loans to members with an even wider variety of financial circumstances.
The grant funding “would be used as loan loss reserves and would allow us to make loans to credit-challenged or income-challenged individuals who may have nontraditional sources of revenue,” Perez told the publication. “We feel very strongly that this type of application of IRA funds will do more for the inner city community.”
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