Credit unions crucial to success of CDFI programs

A new Letter to the Editor in American Banker pushes back against false claims that credit unions have an unfair advantage in accessing the Community Development Financial Institutions (CDFI) Fund. America’s Credit Unions President/CEO Jim Nussle argues credit unions make the program work as intended—serving communities left behind by banks—by offering financial literacy classes, second-chance loans, and needed access to affordable financial services.

“The numbers tell the story. For every $1 of CDFI funding, credit unions deliver a $12 return on investment. Nearly 500 credit unions are certified CDFIs, serving neighborhoods where banks have shuttered more than 20,000 branches over the past decade,” writes Nussle. “During that same period, credit unions opened over 500 new branches—often the only local access point for affordable financial services in rural towns and underserved urban areas.”

Nussle stresses that CDFI grants are “competitive grants, awarded with strict requirements and bipartisan oversight, ensuring that taxpayer dollars achieve maximum impact.” He notes CDFI credit unions are highly effective in helping families, small businesses, and local programs.

“As lawmakers face calls for a so-called ‘level playing field,’ they should see those arguments for what they are: deliberate misdirection and chronic misinformation,” Nussle adds. “Credit unions are doing exactly what the CDFI Fund was designed to do—create economic opportunity, deliver strong returns and empower communities. Congress should maintain its clear, consistent support for credit unions and their continued access to the CDFI Fund.”

An article in BadCredit agreed, highlighting Nussle’s rebuttal. America’s Credit Unions quickly responded to these misleading claims in a statement on Tuesday to set the record straight on credit unions’ important role as CDFIs.

Potential amendments to the National Defense Authorization Act (NDAA) include several that would enhance the CDFI Fund. America's Credit Unions supports efforts to strengthen credit unions' ability to serve their communities.

"It's clear that credit unions are a critical partner in the success of the CDFI Fund. Throughout the country, credit unions bolster the economic success and vibrancy of local communities. We must continue to invest in these types of programs and ensure funds are appropriately allocated to make the biggest impact possible. We will continue to support legislation that allows credit unions to better serve their members, whether as standalone bills or amendments to legislative vehicles that align our priorities with those of Congress and the Administration," Nussle said.