Credit Unions: Friend or Foe?

Friend! Credit unions can be an important ally for community development investments and your Community Reinvestment Act program! 

Ready for a radical idea? Invest in a credit union to improve your CRA investment portfolio!  Not just any credit union of course, but one of the network of Community Development Credit Unions, Low-Income Credit Unions, or Community Development Financial Institution (CDFI) Credit Unions that serve low income or disenfranchised families across the country. A credit union with any of these designations can help you reach a segment of the population that your financial institution just can’t on its own.     

Community Development Credit Unions (CDCUs) serve populations with limited access to secure financial services. Inclusiv, an advocacy organization formerly known as The National Federation of Community Development Credit Unions, certifies credit unions as CDCUs if they  have a mission to serve low- and moderate-income people and communities. CDCUs offer members a place to conduct financial transactions at a reasonable cost, products and services that help members free themselves of high-cost and predatory debt, and financial education to help their members learn how to budget and build assets.  Partnering with a CDCU can give your bank opportunities to provide investment funds as well as service hours. Visit the Inclusiv Membership Directory to find a CDCU to partner with near you.

Helping Hero

Low-Income Credit Unions are designated by the National Credit Union Administration or a state regulatory agency. To maintain the designation, over 50% of its members must be low income, earning less than 80% of the national median income. The Low-Income Credit Union designation provides certain advantages, such as the right to accept non-member deposits and secondary capital and an exception from the statutory cap on member business lending.  These advantages give your bank the opportunity to provide investment funds to the credit unions or partner with the credit unions to increase your ability to make small business loans. Learn more about Low-Income Credit Unions, Low-Income Designation | National Credit Union Administration (

Community Development Financial Institution Credit Unions (CDFI CUs) are mission driven financial institutions serving disenfranchised communities and are certified by the US Department of the Treasury’s CDFI Fund. CDFI Credit Unions must have a primary mission of promoting community development by providing activities that improve the social or economic conditions of low-income people or certain target markets and demonstrate that at least 60% of their financial services activities are directed to low-income consumers and underserved populations. Loans, deposit, equity, equity-like loans, and grants to CDFI Credit Unions can be great CRA investments for your bank. To sweeten the pot, the banks who invest in CDFIs are eligible for a Bank Enterprise Award, a monetary award to banks who have demonstrated an increase in their investments in the most economically distressed communities throughout the nation.   

Investing in CDCUs, Low-Income Credit Unions, and CDFI Credit Unions is one more strategy that can help your bank improve your CRA performance and your community at once.  These credit unions have the expertise and the tools to help our hardest to bank community members.  Reach out today to see how your investment can be the capital they need to build stronger communities. 

Linda Ezuka, Founder, CRA Today and the CRA Hub

Are you ready to take a deeper dive into your mastering the CRA?  The CRA Hub is open for enrollment May 24-31, 2021. We study core concepts like community development investments, CRA data integrity and exam prep! Join us! 

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