The work we do with credit unions allows them to make real differences in the lives of their members and communities. This could be through CDFI certification or grant writing, strategic planning, product design, partnership creation or any of our other many services. And as part of this work, we get to hear the wonderful member impact stories that illustrate what credit unions are doing to unlock opportunities in the communities they serve. We will be highlighting some of these stories here. This story is from Southern Security Federal Credit Union, which has branches in Tennessee and Mississippi. A family made up of a single mother of three young children lost all their belongings when their rental house burned. They had no rental insurance, and the mother was desperate for assistance. She had no family or other support to help with housing, and they needed a place to stay immediately. Southern Security was able to provide her with a bridge loan, personally delivering a check to her right at the hotel where the family was staying, to pay her hotel bill. Going even further, the credit union helped her find a new rental home. Within three days she was able to move her family into the new house--that was larger, closer to her job AND saved her on her rental costs. Thanks to the stability that this provided at a critical time, the member has since paid off the bridge loan and has built up over three thousand dollars in her savings account. CDFI-certified credit unions have countless stories like these to share, and we’re proud to highlight a few from our clients.

Only 55% of American adults believe they will achieve financial independence, according to a recent survey by the National Financial Educators Council. “These survey data show that many people have given up on the American Dream. The findings point to a serious need to raise financial awareness and provide education so people can build confidence and optimism about their futures,” NFEC CEO Vince Shorb stated in announcing the results. Right now, consumers needs are more immediate than chasing some dream. It’s about putting food on the table and gas in their car so they can get to work to support their families. We need to reframe how we approach financial counseling in these unprecedented times, and credit unions are the perfect vehicle to do that while also demonstrating their relevance to American consumers. In a recent article that ran in CU Today, CU Strategic Planning CEO Stacy Augustine told the publication, “It's really great to talk about how you are going to send your kids to college and how you're going to be able to afford retirement, but if you can't afford SpaghettiOs today you're not thinking about college tomorrow.” Increasing debt A report from the Federal Reserve Bank of New York shows a 1.7% rise in total household debt in the first quarter of 2022 alone—an increase of $266 billion. Fixed expenses like housing and transportation are increasing faster than incomes all across the country, creating more debtors and more stress. Members are facing greater needs and anxiety, and finances are often at the root of it. Latest figures show that 64% live paycheck to paycheck – or not even. Augustine noted that financial counseling isn’t just for those who are considered low-income or underserved. It’s vital for everyone. While it’s great to have a few designated financial counselors on staff at your credit unions, right now is time for all hands on deck. “One of the best things a credit union can do now is make sure they leverage their existing staff,” Augustine told CU Today. “People work at a credit union because they care about people, and they care about their members. A lot of times it's the frontline people who can see financial problems starting in members’ lives.” Now is the time to train frontline team members to look for red flags, like canceled checks from payday lenders. Then they can share that the credit union offers financial counseling if the member would like assistance. Unlocking opportunities As part of our services, CU Strategic Planning offers HERO Community Development Certified Financial Counseling Training, which provides instruction, testing and certification to help your credit union better serve members, safely increase lending at lower credit scores to drive profitability and build relationships with community organizations to achieve more collaboratively. The HERO (Helping Everyone Reach Opportunities) online training program focuses on teaching skills that credit union staff can use with people who are seeking financial stability. HERO allows financial institutions to turn members into qualified borrowers by coaching them to become creditworthy. Participants receive testing and security equivalent to a proctored exam, and tools are constantly updated to keep up with predatory lenders’ sneaky ways. Keeping members out of the clutches of payday lenders, buy-here, pay-here auto dealers, title lenders and others is half the battle for financial independence! The benefits of HERO financial counselor training to credit unions are numerous, including well-trained staff to better serve all members, risk mitigation, building member loyalty, keeping up to date on trends and progress tracking. Give your members the gift of a shot at the American Dream by boosting their financial independence. Learn more about HERO Certified Community Development Financial Counseling training.

Note: since the original publication of this article, the CDFI Fund extended the deadline for ERP applications from August 23 to September 22; the text has been updated to reflect that. On June 23, the Department of the Treasury’s Community Development Financial Institutions Fund released the application for the CDFI Equitable Recovery Program (ERP). CU Strategic Planning will host a webinar on July 6 for current clients who have signed on for ERP grant writing services. [editor's note: the date and audience of the webinar has been changed since original publication] The program provides awards to certified Community Development Financial Institutions, with awards ranging from a minimum of $500,000 to a maximum of $15,000,000 or three times an applicant’s average on-balance sheet Financial Products closed in the last five fiscal years, whichever is less. The purpose of the program, according to the CDFI's Notice of Funds Availability, is "1) to expand lending, grant making and investment activity in Low- or Moderate-Income communities and to borrowers, including minorities, that have significant unmet capital or financial services needs, and were disproportionately impacted by the COVID-19 pandemic; and 2) to enable CDFIs to build organizational capacity and acquire technology, staff, and other tools necessary to accomplish the activities under a CDFI ERP Award." To be eligible to apply for an ERP Award an organization must: Be a certified CDFI as of June 23, 2022; Have a track record of serving CDFI ERP-eligible geographies, which CU Strategic Planning can document with past data; and Meet certain financial management criteria, be in compliance with any outstanding CDFI Fund awards, allocations or bond requirements and meet financial and programmatic financial safety and soundness benchmarks. Applications are due September 22, 2022. The CDFI is hosting two webinars, on June 29 and July 7, to present the ERP application. More info about this, as well as the application materials, can be found on the CDFI Fund’s Equitable Recovery Program page. Our team will have the best data foundations and grant writing to make applications that can win the largest awards they are eligible for.

The House Financial Services and General Government Subcommittee (FSGG) approved a FY2023 financial service spending bill that calls for $336.4 million for the CDFI program on June 16, higher than Biden administration’s $331 million request. This is an increase of more than $41 million from the current fiscal year. Support was voiced for the increase by FSGG Subcommittee Chairman Mike Quigley (D-IL) and Appropriations Committee Chair Rosa DeLauro (D-CT), who both spoke of their support for CDFIs and their critical role in distressed and underserved communities. But a number of Republican FSGG members expressed disapproval of the overall increase in funding. The full House Appropriations Committee will be marking up the bill on June 24. The Senate has not yet released its spending bills. In a June 15 letter to the subcommittee, CUNA president Jim Nussle wrote in support of a $330 million appropriation, and supported President Biden’s proposed $5 billion in funding for the CDFI Fund to address the affordable housing crisis and $6 million for the Community Development Revolving Loan Fund. NAFCU president Brad Thaler also wrote on June 15, commending the subcommittee for its proposed increase. Thaler also brought up the issue of the current long delays that credit unions have been facing in responses to their certification applications, mentioning “This would seem to be contrary to the steps Congress is taking to try to expand the use of CDFIs to help communities in need.” “We’re very pleased to see this support for CDFIs in the subcommittee’s spending bill,” said CU Strategic Planning’s Chief Experience Officer Mike Beall. “And greatly appreciate the advocacy of CUNA and NAFCU. CDFI credit unions provide much needed support to underserved communities, creating financial stability at a time it’s very much needed.” CU Strategic Planning has secured $770 million in funding for CDFI credit unions since its inception in 2008, and in the most recent round of Financial Assistance awards its clients received awards averaging $109,274 higher than peers.

The work we do with credit unions allows them to make real differences in the lives of their members and communities. This could be through CDFI certification or grant writing, strategic planning, product design, partnership creation or any of our other many services. And as part of this work, we get to hear the wonderful member impact stories that illustrate what credit unions are doing to unlock opportunities in the communities they serve. We will be highlighting some of these stories here. This one’s about NorthPark Community Credit Union in central Indiana. A member had been with the credit union for about five years when she called one day in tears, because she had just gotten notice from an attorney about a legal matter from ten years ago. The woman had thought all issues had been resolved, but she now was in danger of having her wages garnished if she didn’t have $500 in the next two days to pay a final fee. The thought of having her wage garnished was embarrassing and upsetting. This member had a micro loan with NorthPark, which was nearly paid off. The rep she talked to told her she qualified for another micro loan with a good interest rate, and that her current loan balance could be incorporated into the new loan. The rep explained how to use NorthPark’s secure chat system, which made it quick and easy to provide the needed documents. Within two days the loan officer finalized the loan over video chat, and the member was so relieved that she's become one of NorthPark’s biggest boosters among her friends and family. CDFI-certified credit unions have countless stories like these to share; we’re proud to highlight a few from our clients.

The work we do with credit unions allows them to make real differences in the lives of their members and communities. This could be through CDFI certification or grant writing, strategic planning, product design, partnership creation or any of our other many services. And as part of this work, we get to hear the wonderful member impact stories that illustrate what credit unions are doing to unlock opportunities in the communities they serve. We will be highlighting some of these stories here. This story is about New Orleans Firemen’s FCU, which happens to be the third oldest federal credit union in the country. A member had come into the credit union branch to make a deposit, and was chatting with the member service representative. Over the course of the conversation she mentioned that she was having some financial difficulties. The rep suggested she speak to one of their financial coaches, and the member agreed. New Orleans Firemens’ has a dedicated Financial Inclusion team, and one of the reps reached out to her. The member explained she had recently gone on permanent disability due to an illness, causing her income to drop significantly. She had a car loan, signature loan and credit card through the credit union. They were able to refinance her car loan and consolidated her other loans, including three credit cards held elsewhere. The member was originally paying more than $1,000 a month between all her loans, and after consolidation it dropped to nearly half that amount. She was so grateful that the member service rep really listened during their friendly chat over a routine deposit, and arranged for her to work with someone who could both consolidate her loans and offer financial coaching. CDFI-certified credit unions have countless stories like these to share; we’re proud to highlight a few from our clients.

“How do you know that about our members?” That’s a common question we get from prospects and clients. We’ve learned the critical nature of deep and comprehensive data for successful certifications and grant applications—something that’s helped us become the leading consultancy for credit unions when it comes to Community Development Financial Institution Fund certifications and FA awards. And we know that as the industry and its regulators become more adept at data analytics, accurate data models will become even more important to the certification and awards process. Right From the Start Our data analysis work starts even BEFORE the beginning; when a prospective client credit union reaches out to us about possible CDFI certification, we first review financial and geographical data from multiple sources to gain an understanding of the credit union’s position and potential for eligibility. We don’t want to send a credit union down the road of certification if it’s not likely to be granted, wasting everyone’s time and money. We know these characteristics based on the experience of our seasoned team and the data we work within. Due to the increase in CDFI certification applications in recent years, the CDFI fund experienced an unprecedented backlog, and many applications submitted in 2021 were not approved until early 2022. CU Strategic Planning clients account for 26 of the 51 credit union certifications granted in 2022 to date. Building on an Informational Foundation As we continue through the process of certification or the writing of an FA award application, we’re able to use our research and data analytics to show our clients insights about their credit unions they didn’t even realize. CU Strategic Planning takes the data our clients provide and combines it with government and other reliable information sources that include partners like TransUnion and Callahan to determine: Where our clients are lending What types of members they serve What their capabilities are for growth in particular areas Which products would most benefit their members What the needs are in their communities Looking to the Future The financial services landscape is changing, and we’re evolving with it. We’re moving in a direction that will allow us to use this data far more efficiently and powerfully, and we’re excited about the possibilities that will bring. We’re building a framework that will allow us to harness all that information and make it work together to optimize the results for our credit union clients to unlock the opportunities in their communities, for themselves and for their members. We are devoted to helping credit unions achieve a mission that makes a difference in average peoples’ lives. As more institutions are seeking CDFI certification and grants, and as the entire financial industry is getting more adept with data analytics, the process will become more rigorous and competitive. At $770 million in CDFI Fund awards and 175 CDFI certifications, we’ve been successful in effectively helping credit unions reach more people who need their services. But we will never rest on our laurels. Improving our own data analytics will help ensure we continue to provide unimpeachable data and advice to our credit union clients. Loan funds still outpace all other CDFI types in the number of base Financial Assistance awards won. Credit unions, as well as banks and holding companies, have been starting to close the gap in the past two years. We won't know until the FY2022 awards are announced if the newly certified CDFI credit unions from most of 2021 and early 2022 (see above) will be reflected in the proportion of awards won.

The work we do with credit unions allows them to make real differences in the lives of their members and communities. This could be through CDFI certification or grant writing, strategic planning, product design, partnership creation or any of our other many services. And as part of this work, we get to hear the wonderful member impact stories that illustrate what credit unions are doing to unlock opportunities in the communities they serve. Sisseton-Wahpeton is a 100% Native CDFI, located on the Lake Traverse Reservation in South Dakota and started by the Sisseton-Wahpeton Oyate. This story comes from a very small credit union client of ours—Sisseton Wahpeton FCU in South Dakota, and it’s one of our favorites. A single mother was supporting three children and one grandchild all on her own, and unexpectedly had her hours at work reduced. She quickly realized that with her lower income she wouldn’t be able to feed her family and still keep up with the payments on her truck loan that was held by the credit union. So she listed her truck for sale online on a local forum. A Sisseton-Wahpeton employee saw the post, recognized the vehicle and member, and reached out to her to see if the credit union could do anything help her keep her truck. The rep proactively researched refinancing options, reviewing the current loan information and the member’s current income, and determined she was able to refinance. A few days later, the member refinanced her truck and her new monthly payment was over $320 lower, making it possible to keep her reliable source of transportation—something that’s critical rural South Dakota. And even beyond the lower payment, the credit union rep also arranged for her to skip four payments without penalty. During those months the member was able to find a second job to make up for her reduced income. She’s current on her loan and has no issues making payments. Stories like these are why we’re so passionate about helping credit unions gain CDFI certification and writing grant applications that will allow them to continue and expand their work. Our mission is to unlock credit union capacity to change communities, and we’re proud to highlight a few examples of how our clients are doing that.

The NCUA recently announced its streamlined Community Development Financial Institution certification platform, based on a basic, automated loan analysis, is going away. This platform proved useful for credit unions that meet very specific criteria. Importantly, however, it often rejected credit unions that should have qualified. We’ve seen it: CU Strategic Planning has re-applied for many credit unions that were initially turned down by the automated system and were able to get them approved. It’s critical to leverage the knowledge of experts who have successfully applied for grants on behalf of hundreds of credit unions. If you needed another reason why, the CDFI Fund will be changing the CDFI certification process later in 2022. Four more nuanced paths to certification exist, such as serving: A membership of which 60% are low- to moderate-income A membership of which 60% have been traditionally disenfranchised A low-income geographic area or A blending the various options Even if your credit union already was turned down through the NCUA’s streamlined process, you likely can become CDFI certified and gain access to all the benefits that come with it so you can serve your members better. Applicants must submit a CDFI Certification Application to the CDFI Fund for review. The application documents how the organization meets the certification requirements, including: Submitting a charter to show that the applicant is a legal, non-government entity and not be under the control of any government entity at the time of certification application. Tribal governments are typically excluded from this requirement. Submitting a mission statement and/or board resolution documenting a primary mission of promoting community development. Conducting a loan analysis, mapping and other documentation to show the applicant primarily serves one or more “target markets.” A target market can be either a historically distressed investment area, a low-income population, or an “other targeted population” (OTP). OTPs are vulnerable or underserved populations that have historically been denied credit or lack adequate access to capital. Demonstrating that the organization is accountable to its designated target markets through the make-up of its board of directors or an advisory board, where the members are representative of the target market. Demonstrating that the applicant must be a financing entity. Regulated certification applicants, including CDFI credit unions, are deemed to automatically meet the financing entity criteria. Documenting the “development services” the organization provides in conjunction with its financing activities. Development services include technical assistance or training activities that prepare borrowers to access the institution’s financial products. There must be a direct link between the institution’s development services activities and its financial products. Primarily, CDFI credit unions are seeking the right to apply for CDFI Financial Assistance Grant funds for up to $1,000,000 that help them serve these historically underserved markets. We often advise our clients to use these funds for loan loss reserves as an extra cushion to protect members’ hard-built capital, while also reaching out to members of their community who are underserved or economically distressed with new or expanded products and services. Once a credit union has been certified, annual reports also must be filed to maintain its certification and eligibility for CDFI Fund grants. If you miss it, the process starts all over again! CDFI certification is intense and involved, but if your credit union has the means and the heart, the results for your community are your reward. CU Strategic Planning has more than a decade of experience helping hundreds of credit unions become certified CDFIs by the U.S. Department of Treasury’s CDFI Fund. We’ve helped credit unions earn more than three-quarters of a BILLION dollars in funds through CDFI. Let us help guide your credit union through the winding process. Contact us today to learn more.

With the click of the “Submit” button on the last of our client FY2022 CDFI FA and TA grant applications, our most intense season is at a close. Curious about what goes into getting these out the door? Our work begins with client kick-off calls and data collection in the summer; by the time the CDFI has opened applications with its Notice of Funds Availability (usually 60 days before the deadline), we’re already well on our way! Each grant is assigned an advocate—someone who is the point person between the credit union and our team. They “own” the application but are far from the only person working on it. Although the work is very challenging, it is beyond rewarding! Watching the grants come together and seeing all the life-changing products to help transform communities is amazing. This is a team completely dedicated to helping people help people. Shea Bredlie, Community Development Manager Each grant application we submit is the product of at least 15 different people’s work, as we make sure a subject expert handles each section. Research, product and partnership development, credit union finances, writing, editing—we ensure every component goes to the right person. Then when it comes time to submit, 800 different inputs are plugged into the AMIS software, distributed over about 50 sections. Making sure that every component of the application is perfect every step of the way is definitely stressful, but it’s really rewarding to be able to contribute to the work these credit unions are doing. Michele Lenox, Community Development Manager With so many moving parts, the team relies on our AVP of Operations Kathleen Falotico, who keeps everything running behind the scenes and ensures that the information is double-checked each step of the way. The last stretch of grant writing and advocating for our CDFIs’ commitment to helping low-income and/or minority communities creates such a great feeling of accomplishment - but even more so, pride in our clients’ work described in these grants and how many disadvantaged people they are helping. Jessica LaRocca, Community Development Manager CU Strategic Planning’s mission is to help credit unions unlock their potential to change lives. We are excited about the strategies our team was able to help our client credit unions create as part of the comprehensive business plan behind each Financial Assistance or Technical Assistance grant application. These CDFI credit unions are doing remarkable work changing and improving their communities all across the country. Now, we must wait for the announcement (which, with any luck, will happen in September this year), to learn how much more we’ll be adding to our current tally of $770M in CDFI funds earned for CDFI credit unions. If you’d like to learn more about how CU Strategic Planning can help your credit union become CDFI certified, apply for grants or maintain CDFI certification, please get in touch!

Black Americans have relied on cooperatives since the 19th century, when both free and enslaved Black people would pool their money to pay for things like burials, helping the sick and orphaned, and even buying freedom for one another. And what’s possibly the most famous cooperative effort in this country’s history? The Underground Railroad. But for obvious reasons, a lot of these cooperative efforts were kept quiet. When groups like the Colored Farmers’ National Alliance and Co-operative Union created buyers’ co-ops that took profit away from White-owned businesses, it led to retaliation. So these co-ops were at the same time sorely needed and risky. Perhaps it’s not too surprising that the story of Black credit unions often starts with a general “in the 20s and 30s” – during what we often think of as the first groundswell of the American credit union movement. It’s time to learn about Thomas B. Patterson and Piedmont Credit Union. Less than three years after the state of North Carolina authorized credit unions in 1915, to be overseen by the State Agricultural Department and the State College of Agriculture and Engineering, Thomas Patterson established the first Black credit union. He wrote about the experience in The Southern Workman in 1920 in an article title “Negro Credit Unions of North Carolina:” “The Piedmont Credit Union of Landis was organized April 19, 1918, with twenty-three members and a paid-in-capital of $126. It was the first effort ever made to organize a credit union among Negro farmers, so it was intended merely as an experiment to study the advisability of continuing such an organization. The experiment was so successful that three other unions were organized in different parts of the county. During the year just passed nine credit unions were organized in another county of the State, making thirteen Negro organizations up to date.” As of Dec 31, 1919, Piedmont had 82 members, 6 depositors and 10 borrowers, with total resources of $1347.83. There was a $50 loan limit on cash loans for food supplies, as most loans were made for farm supplies and home or farm improvements. The aim of Piedmont was to eliminate dependence on supply stores, where Black farmers could buy what they wanted on “time” but often at a highly marked-up price, and found that this left them with no profit after crops came in: “Now the credit unions steps in here, takes the place of the supply store, and lends the farmer member sufficient cash, at a reasonable rate, to buy his supplies in the open market, saving himself the time prices, which no doubt are always higher. In other words, the credit union recognizes the fact that no farmer tied to the supply store can reasonably be expected to render good service, become a good citizen, or do efficient work so long as he is thus handicapped.” So now instead of crushing interest rates, Patterson explains, “A member can borrow from a few dollars up to a hundred, or more for any length of time within the current year. He is charged at the rate of six per cent interest for the actual time he has the loan. His word in the community and his ability to repay the loan are his chief assets. The name of some other man of standing in the community, couple with his on his note, usually procures his loan with very little, if any, delay.” It's worth pausing a moment to consider the impact this financial empowerment must have had on the Black farmers in North Carolina. Membership in a credit union meant that not only could they see their farms survive difficult years, they could actually build wealth, by refusing to “feed the lion of prejudice,” as Black banking titan Maggie Walker described it. Black Americans' first taste of democracy came from cooperatives, entrenched in all members having an equal vote and, really, a vote at all at the time. The Black experience of cooperative finance is a key part of credit union history and credit unions, as always, were there to help the underserved.

The work we do with credit unions allows them to make real differences in the lives of their members and communities. This could be through CDFI certification or grant writing, strategic planning, product design, partnership creation or any of our other many services. And as part of this work, we get to hear the wonderful member impact stories that illustrate what credit unions are doing to unlock opportunities in the communities they serve. We will be highlighting some of these stories here. A member of FLAG Credit Union in Florida had been recently divorced, and was finding himself overwhelmed by the reality of his overall financial picture. He had primary custody of three school-age children and was concerned about paying his bills, especially now that there was no second income. His spouse had always taken care of the bills, so he had no idea what they owed or who they owed money to. Now he worried about being able to even provide food and clothing for his children. His goal was to provide for his children and get his finances to a manageable state, while paying off high interest credit cards. When he approached FLAG Credit Union, his credit limit was at its capacity and his ability to repay was above standard policy limits. The credit union representative looked at the divorce decree and removed the debts that he was not responsible for. This reduced his debt-to-income ratio and allowed the credit union to provide the member with a consolidation loan at a reasonable rate. The credit cards were closed and the member’s monthly expenses were reduced, allowing him to provide for his children. FLAG prioritizes looking at the specifics of an individual member’s financial situation, and looks beyond standard policy when called for. The credit union reviewed the financial situation and prospects of the divorcing member, and took the opportunity to help him get his debts under control and become financially sound. CDFI-certified credit unions have countless stories like these to share; we’re proud to highlight a few from our clients.