Around 26 credit unions have applied for funds under the Treasury Department's Community Development Capital Initiative, according to NCUA officials participating in a Web event about the program today.
Applying is a multiple step process, starting with NCUA. The program is funded with Troubled Asset Relief Program money and credit unions that have been designated as low income and recognized as community development financial institutions can apply.
Officials from the National Federation of Community Development Credit Unions and Treasury answered some of the detailed questions that hampered some credit unions from applying. For example, Treasury officials could not answer whether credit unions could apply for CDCI money for less than the full 13-year period outlined by the program. This question is particularly important to CUs that have been told they will need to obtain matching funds from a private source in order to bring their capital up to participate in the program.
"Thirteen years is a very long term for private funds to have," said Cliff Rosenthal, CEO of the NFCDCU, which hosted the event.
The program has also been hamstrung by a general vagueness about its terms and the feeling among some credit unions that they are being asked to sign onto something they don't yet know enough about.
"Truthfully, I am not yet ready to take a proposal to my board on this since I think there are still too many things that are vague," complained Marty Tressell, CEO of the High Plains Federal Credit Union in Clovis, N.M.
Treasury officials indicated that they will try to have answers to the questions by next week.
