WASHINGTON -- Community Development Credit Unions that are havebeen certified as community development financial institutions willbe eligible to receive capital in the form of subordinated debt atan interest rate of 2% for eight years, Obama Administrationofficials explained today.
Under the terms of the program, which the officials stressed wastotally separate from the small business lending initiative theadministration launched yesterday, CDCUs would need the approval ofNCUA to participate in the program and would need to be consideredstrong institutions. The officials said the Treasury has reachedout to the NCUA and that the agency supports the program.
CDCUs that might not have sufficiently strong capital positionsto participate will be able to approach private investors orfoundations for half of the capital they would need. The other halfof the necessary capital would come from TARP funds the officialssaid.
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