CDFI CREDIT UNIONS BUILD INCLUSIVE ECONOMIES

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1 I M P A C T O F C D F I C R E D I T U N I O N S O N C O N S U M E R S A N D C O M M U N I T I E S CDFI CREDIT UNIONS BUILD INCLUSIVE ECONOMIES N A T I O N A L F E D E R A T I O N O F C O M M U N I T Y D E V E L O P M E N T C R E D I T U N I O N S

2 2 The CDFI Fund is one of the Federal government's best market-based strategies for leveraging private dollars. CDFIs leverage $12 of private capital for every $1 of public investment. Investing in CDFIs generates billions of dollars annually in the form of loans to create jobs and grow businesses, build homes, increase job mobility, expand access to affordable healthcare and childcare, and create financial capability to expand consumer purchasing power. C A T H I E M A H O N, C E O / P R E S I D E N T N A T I O N A L F E D E R A T I O N O F C O M M U N I T Y D E V E L O P M E N T C R E D I T U N I O N S

3 L A W R E N C E, M E M B E R O F 1 S T C H O I C E C R E D I T U N I O N, A T L A N T A, G A 3 CDFI CREDIT UNIONS HELP BORROWERS ESCAPE THE PREDATORY LOAN TRAP Lawrence came to 1st Choice Credit Union in financial distress after borrowing from a predatory lender, notorious for targeting minority communities. Lawrence is very dependent on his car for work, but high interest rates and fees on his auto loan added up, and eventually he owed $2,000 more than the car was worth. He also had a personal loan with a 35% interest rate and several credit cards. Unlike the predatory lender, which offered to help with more high-interest loans, 1st Choice Credit Union cut Laurence s interest rates in half with a refinanced car loan and a personal loan to offset the negative equity ultimately reducing his debt payments by more than $300 each month! This credit union has really saved my life!

4 T H E G A R C I A F A M I L Y, M E M B E R S O F N O R T H J E R S E Y F E D R A L C R E D I T U N I O N, T O T O W A, N J CDFI CREDIT UNIONS MAKE HOMEOWNERSHIP POSSIBLE Mr. and Mrs. Garcia and their five children recently purchased their first home, thanks to an ITIN mortgage from Juntos Avanzamos-designated North Jersey Federal Credit Union and the Federation s CDCU Mortgage Center ITIN lending program. Individual Taxpayer Identification Number (ITIN) lending programs allow immigrants, Permanent Legal Residents and DACA recipients to access loans and mortgages, regardless of immigration status.

5 K I N E C T A F E D E R A L C R E D I T U N I O N, M A N H A T T A N B E A C H, C A 5 CDFI CREDIT UNIONS HELP PEOPLE OUT OF HIGH-COST DEBT A serious car accident, a death in the family, hours at work suddenly cut common, but unexpected situations can lead to new expenses and diminished income. With limited options available, many people turn to payday loans, moving from loan to loan and falling deeper into debt. Nix Neighborhood Lending, a Credit Unit Service Organization of Kinecta Federal Credit Union, provides alternatives to help people in their community escape the payday loan cycle.

6 T I F F A N Y, M E M B E R O F S T. L O U I S C O M M U N I T Y C R E D I T U N I O N, S T. L O U I S, M O 6 CDFI CREDIT UNIONS BREAK THE PAYDAY DEBT CYCLE Tiffany needed a small personal loan to pay property taxes and an auto loan so she could get to work. In the past when she needed to borrow money - especially in emergencies - Tiffany had turned to high-cost payday lenders, but a friend referred her to St. Louis Community Credit Union instead. Every time, it was refinance after refinance, and the interest and fees built up every month. All that time I could have been repaying the credit union $100 per month when I was paying [a predatory lender] $300. By consolidating her loans with SLCCU, Tiffany was able to break the payday debt cycle, and save a lot of money in the process.

7 C R E D I T U N I O N S A R E T H E B E S T C H O I C E F O R L E N D I N G I N L O W - I N C O M E C O M M U N I T I E S Credit unions are highly concentrated in CDFI target markets. With safe and affordable financial products and services, credit unions are the best choice for lending effectively and profitably in low-income communities. An additional 300+ credit unions may be immediately eligible for CDFI certification.

8 D A R R E L L, M E M B E R O F S E L F - H E L P F C U, S A N F R A N C I S C O, C A 8 CDFI CREDIT UNIONS PROMOTE HIGHER EDUCATION When Darrell found himself homeless after Hurricane Katrina, he made his way to San Francisco. Finding housing wasn t easy without good credit, paycheck stubs, or bank statements. When Darrell enrolled at City College, they referred him to Self-Help Federal Credit Union. I didn t have the best credit scores. They had to take a chance on me, Darrell recalls. He began with a secured credit card and then graduated to a Fresh Start Loan. Within two years, his credit score jumped 300 points.

9 C H R I S, P A R T N E R W I T H F R E E D O M F I R S T C R E D I T U N I O N, R O A N O K E, V A 9 CDFI CREDIT UNIONS SUPPORT JOB TRAINING Chris at CDS Tractor Trailer Training knew there were many potential students who could not afford the classes required to earn a commercial driver's license. Freedom First Credit Union partnered with CDS to provide short-term, smalldollar loans to students who wanted to get their commercial drivers license. This partnership is a win for everyone involved. We are able to get more students into school and faster. The students benefit the most by getting the credit they need to go to school and start working, explains Chris. Freedom First CU employs 160 people across 10 branches, all dedicated to helping Virginia communities in Montgomery, Botetourt, and Roanoke counties thrive.

10 J O S H U A, M E M B E R O F S E L F - H E L P F E D E R A L C R E D I T U N I O N, S A N F R A N C I S C O, C A 1 0 CDFI CREDIT UNIONS HELP YOUNG ADULTS BUILD CREDIT Working a full-time, minimum wage job and still unable to meet basic living expenses, Joshua took out several payday loans. He also found himself delinquent on several accounts including a federal student loan and a major credit card. Joshua enrolled in Year Up Bay Area and MyPath Credit, a partnership between MyPath and Self-Help Federal Credit Union to connect young, underserved consumers to quality financial services. In six months Joshua s credit score jumped dramatically from zero to over 600.

11 H I C U B U R U N D I & N T I B A M U M P A Y E, M E M B E R S O F G E N E S E E C O - O P F C U, R O C H E S T E R, N Y CDFI CREDIT UNIONS HELP TO RESETTLE REFUGEE FAMILIES Hicuburundi and Ntibamumpaye, refugees from Burundi, were determined to start a new life in the United States. Shortly after arriving in Rochester they joined Genesee Co-Op Federal Credit Union. They d begun saving for their first home when a slot opened in the local Rochester Acquisition-Rehab Program. Through Genesee Co-Op the couple were able to buy a wonderful, affordable house in the northwest section of Rochester. They put 3% down and got closing cost assistance.

12 C L E M E N T E, M E M B E R O F N E I G H B O R H O O D T R U S T F C U, N E W Y O R K, N Y 1 2 CDFI CREDIT UNIONS EMPOWER SUCCESSFUL SAVERS When he started using the financial counseling services at Neighborhood Trust Federal Credit Union, Clemente needed to improve his credit. At his Financial Counselor s recommendation, he opened a secured credit card from Neighborhood Trust. He also reduced his debt by over 80% and saved more than $3,000! The secured credit card has helped me a lot, says Clemente. In one year, I ve seen my credit score jump 84 points!" Neighborhood Trust FCU is attuned to the needs of the Washington Heights neighborhood of New York City - they use flexible underwriting criteria to make loans to consumers who might otherwise turn to predatory lenders.

13 13 To Congressmen and Council Members at the state and national level, please do everything in your power to maintain the subsidy for the financial counseling program and to the credit unions that provide them. Without this program, many people will simply fall into an abyss and won t know how to manage their finances. Please do all you can to maintain this program and the services of the credit union, so that other people can also take advantage of it, just like I did. There are no words to describe such an important service. CLEMENTE, MEMBER OF NEIGHBORHOOD TRUST FEDERAL CREDIT UNION, NEW YORK, NY

14 EDUARDO, MEMBER OF COOPERATIVE FEDERAL CREDIT UNION, SYRACUSE, NY CDFI CREDIT UNIONS HELP IMMIGRANT FAMILIES ESTABLISH A SOLID FOUNDATION Eduardo is a Cuban immigrant who was struggling to manage the unexpected costs associated with buying a new car. Eduardo's friends referred him to Cooperative Federal, where he was approved for a personal loan to straighten out his finances. Eduardo and his wife, Kenia, also enrolled in the Credit Builder Loan Program. Cooperative Federal s Loan Processor, Carlos, worked with Eduardo and Kenia to help them get on their feet and better understand the U.S. financial system. Carlos saved our life, says Eduardo. 14

15 B R O O K E A N D D A N I E L, M E M B E R S O F M I S S O U L A F C U, M I S S O U L A, M T 1 5 CDFI CREDIT UNIONS IMPROVE ACCESS TO AFFORDABLE HOUSING Newlyweds Brooke and Daniel wanted a place to call their own. Manufactured housing was an affordable option, but financing can be difficult because conforming mortgages require a permanent foundation. They turned to Missoula Federal Credit Union and learned they could get a mortgage at a reasonable rate regardless of foundation type. "Now friends, co-workers, and even our insurance agent are asking us how we were able to find and get the loan. Our answer is to go talk to Missoula Federal, says Daniel.

16 Y A G O, M E M B E R O F B O R D E R F C U, D E L R I O, T X 1 6 CDFI CREDIT UNIONS CLEAN UP POOR CREDIT REPORTING When Yago moved to the United States he opened a savings account at Border Federal Credit Union and discovered his credit report included false information. Diana, a Border Financial Counselor, worked with Yago on an action plan to correct his report, including dispute letters, phone calls to creditors and filing police reports. It took a year, but Yago was finally able to clear all negative and incorrect information from his credit report. Now, he regularly refers family and friends to the counseling department, praising their knowledge and ability to provide simple solutions to complex problems. Border is a Juntos Avanzamos designated credit union, committed to empowering Hispanic consumers.

17 17 Despite serving the most economically distressed communities in the nation, CDFI credit unions consistently outperform their peers in growth, earnings and services, because they find and build new markets of successful borrowers. PABLO DEFILIPPI, SVP OF MEMBERSHIP AND NETWORK ENGAGEMENT NATIONAL FEDERATION OF COMMUNITY DEVELOPMENT CREDIT UNIONS

18 NICK, MEMBER OF HOPE CREDIT UNION, JACKSON, MS CDFI CREDIT UNIONS PROMOTE FINANCIAL WELLNESS Nick is the founder of Creativity Kitchen, a hands-on program that teaches Jackson Public School students about healthy eating. A home financed with a loan from Hope Credit represented something much more to Nick than buying his family their first home. "The majority of the men in my family didn't make it to age 42. They died of alcoholism, high blood pressure and unhealthy lifestyles. No one in my family had ever owned a business or a house. HOPE didn't just give me a mortgage loan. HOPE helped me create a new family legacy." 18

19 RICHARD, JOHN AND ANTHONY, MEMBERS, GOVERNMENT PRINTING OFFICE FCU, WASHINGTON, DC CDFI CREDIT UNIONS PARTNER WITH COMMUNITY ORGANIZATIONS Government Printing Office Federal Credit Union and DC Central Kitchen have joined forces on a Culinary Job Training Program. Students accepted into the program come from diverse backgrounds with histories of incarceration, substance abuse, homelessness or long-term joblessness. Weekly stipends are provided to offset students' personal expenses during the week program. To encourage asset building, GPOFCU offers a Starter Investor Account for students to save a portion of their stipend. Even if it's just $2 a week, students begin saving for their financial goals and take steps to build assets. Richard, John and Anthony are rebuilding their credit with a Fresh Start Secured Visa credit card.

20 S A N D R A, M E M B E R O F O P P O R T U N I T I E S C R E D I T U N I O N, W I N O O S K I, V T 2 0 CDFI CREDIT UNIONS HELP GROW SMALL BUSINESSES The Hairy Bear, Sandra s South Burlington, VT hair salon, is a family-centered small business committed to serving the community and launching the careers of young stylists. When Sandra first took ownership, this now-thriving salon was struggling to survive. Opportunities Credit Union had helped Sandra, a single Mom, to buy a house for her family, so Opportunities was the first place Sandra turned to for help with her business. Sandra met with Greg, Opportunities Senior Business Development Manager, who helped her take out a small business loan to redesign and reopen The Hairy Bear in a new, high-traffic location. If it wasn t for this loan, The Hairy Bear probably would not be in business anymore, Sandra said.

21 G E R A L D I N E, M E M B E R O F F A I T H C O M M U N I T Y U N I T E D F C U, C L E V E L A N D, O H 2 1 CDFI CREDIT UNIONS HELP SENIORS AVOID FORECLOSURE After retiring, Geraldine was determined to remain in the Cleveland home where she d raised her family. But her fixed income made it difficult to cover the bills when property taxes were due, and before she knew it, she d fallen behind. Geraldine turned to the Faith Community United Credit Union and ESOP (Empowering and Strengthening Ohio s People) Senior Property Tax Loan program for help. I had to make some adjustments, but now I can pay my bills, and I don t have to worry.

22 L U Z, M E M B E R O F B R O O K L Y N C O O P E R A T I V E F E D E R A L C R E D I T U N I O N, N E W Y O R K, N Y CDFI CREDIT UNIONS HELP DACA RECIPIENTS PURSUE THE AMERICAN DREAM In partnership with the New Economy Project, Juntos Avanzamos-designated Brooklyn Cooperative Federal Credit Union has helped hundreds of New Yorkers secure an interestfree loan from the NYC DREAMer Loan Fund, which helps immigrants cover the costs of applying for Deferred Action for Childhood Arrivals (DACA). Brooklyn Coop member Luz, a Queens resident who immigrated with her family from Mexico, has been able to find a job, cash checks, pay her bills, pay taxes and begin building a credit history. Now I m not afraid to go out and apply for a job. I feel more comfortable with myself. I just want to give thanks for this big opportunity I have in my life. It s just so wonderful and I feel so happy.

23 C D F I C R E D I T U N I O N F A C T S 2 3 To become Community Development Financial Institutions (CDFIs), credit unions must direct at least 60% of their financing activity in economically distressed markets and build the capacity of their members to improve their financial security. There are 305 CDFI credit unions in the United States serving more than 9.5 million members CDFI credit unions hold more than $100 billion in combined assets that stay in the community CDFI credit unions have 1,015 branches in economically distressed CDFI investment areas and 276 branches in persistent poverty counties 21% of the people who live near CDFI branches are below the poverty level CDFI credit union provide affordable loans in communities that most need access to credit; their combined loan/share ratio is 77% CDFI credit unions have more than $70 billion in loans outstanding

24 N A T I O N A L F E D E R A T I O N O F C O M M U N I T Y D E V E L O P M E N T C R E D I T U N I O N S 2 4 #FundCDFIs The National Federation of Community Development Credit Unions is celebrating the overwhelmingly positive impact CDFI credit unions have on the low-income communities they serve. The Federation urges Congress to continue full funding of the CDFI Fund to expand economic opportunity throughout the country. C A T H I E M A H O N C E O / P R E S I D E N T C M A H O C D C U. C O O P C L A R I S S A R I T T E R D I R E C T O R O F M A R K E T I N G A N D C O M M U N I C A T I O N S C R I T T E C D C U. C O O P 3 9 B R O A D W A Y, S U I T E N E W Y O R K, N Y W W C D C U. C O O P