By Stacy Augustine

As frustrating and concerning as it was to read the president’s March 14 executive order which called for the CDFI Fund, among other organizations, to be “eliminated to the maximum extent consistent with applicable law,” the response from the credit union and CDFI communities was the exact opposite: heartening and inspiring. With less than 24 hours’ notice, we saw hundreds of people join a mid-day webinar on a Monday—proof of just how much this industry cares and is ready to take action.

Across the CDFI and credit union sectors, organizations have spoken out, recognizing the significance of this moment. We know firsthand the power of the CDFI Fund to transform communities and elevate a credit union’s mission of people helping people.

I’ve had the privilege of learning about these impacts from hundreds of CDFI credit unions and the opportunity to see how CDFI certification and funding opportunities allow mission-driven credit unions to leverage these investments to even greater impact. They may take the form of helping a member secure their first home, financing a small business that will revitalize a neighborhood, or offering a lifeline to families who have been excluded from traditional banking. 

These moments aren’t rare; they’re happening everywhere. Here are just a few examples.  

From Branches to Breakthroughs

Southwest Louisiana Credit Union has seen both its assets and loan balances nearly double in the seven years since becoming certified as a CDFI. In that time, they’ve added three new branches—one in a community health center and one in a banking desert—and have added products and services driven by community need such as small business loans and accounts, financial counseling services, HELOCs, first-time homebuyer loans and more. 

In 2024 alone, the credit union awarded over $100,000 in grants to members, between its Greaux Your Business program and Hand Up to Homeownership program. Both of these combine financial education and counseling with the technical support that helps members successfully grow their businesses or buy their first homes. 

Going Mobile

One of my favorite things about the ways CDFIs operate is the way they’re always looking out for what their communities need. Calhoun Liberty Credit Union is located in the Florida Panhandle and no stranger to natural disasters. It purchased a mobile ATM that ensures access to cash in the aftermath of natural disasters, and CEO Thomas Flowers tows it behind his own truck to wherever it’s needed. No one pays a fee to use the ATM, because Calhoun Liberty reimburses fees charged to any non-member by their own institution. 

Often the stories we hear about individual member interactions are the most moving. Veridian Credit Union helped a member referred through a partnership with the Iowa Heartland Habitat for Humanity Neighborhood Repairs program. She had recently adopted her three grandchildren and needed a larger home with a wheelchair ramp to accommodate them, but had been turned down by other lenders. Veridian’s Community Inclusion Strategist enrolled her in an IDA Match Savings program, helped her apply for a Financial Inclusion mortgage, and even helped her update her student loan repayment paperwork as part of ongoing financial education and support throughout the process. 

The Multiplier Effect 

Do credit unions need to be CDFIs to have an impact with lending? Of course not. Credit unions are America’s original community development financial institutions, and I imagine that your credit union has its own stories of impact it could share, whether or not it’s a CDFI. 

One of the benefits of CDFI certification is that it opens avenues for federal grants, which can greatly expand lending capacity—offering more loans on better terms than otherwise possible. 

This expanded capacity could take the form of:

• Increased loan volume: the proliferation of payday lenders, pawn shops and buy-here, pay-here auto dealers in many undeserved communities underscores the continued demand for small dollar loans if a credit union has the capacity to make them.
• More affordable loans: lower rates, longer repayment terms, or lower down payments.
• Mitigated lending risk: funding can serve as a cushion that makes it possible to lend to higher-risk borrowers while still remaining well-capitalized. 
• New products: launching a product line carries cost and risk even when a credit union has identified the demand. Grants make it possible to experiment with new products or products with new terms that meet the needs of your community. 

A Stronger Bottom Line

This expanded capacity helps the credit union grow and build a stronger bottom line representing a dual bottom line benefit: helping members while maintaining the credit union’s financial health. 

CDFI credit unions are in tune with their communities. They see the needs of their members and prospective members. They’re the ones showing up towing a portable ATM! They work with domestic violence shelters, community health centers, and prisoner re-integration programs. This comes as no surprise, because this is what credit unions were built for, and central to our mission of people helping people.

In other words, the impact is obvious.

Stacy Augustine is the President of CU Strategic Planning, which works with community development and mission-driven credit unions to change the lives of their members and communities. The firm has certified more than 200 credit unions as CDFIs and secured over $1 billion in award funds. Ms. Augustine can be reached at [email protected].