Forty-eight credit unions received almost $70 million from the U.S. Treasury's Community Development Capital Initiative program, according to the National Federation of Community Development Credit Unions.
"This is day of celebration for CDCUs," said Federation CEO Cliff Rosenthal. "This is the largest capital infusion in low income, community development credit unions in my thirty years of working with them," he added.
The CDCI Program was an initiative launched by the Obama Administration with some of the Troubled Asset Relief Program money that had been repaid by banks which were the original recipients. Under the the program, credit unions that were recognized as community development financial institutions by the Treasury Department's CDFI Fund and as low income by NCUA were eligible to apply for long term loans from the Treasury Department.
The CDCI money, subject to some conditions, can be viewed as secondary capital for regulatory purposes, a fact which will help some CDCUs weather the current economic downturn and still grow, Rosenthal said.
As much as the Federation celebrated the CDCI money, Rosenthal acknowledged that a number of credit unions which needed and qualified for the funds were not able to apply for them or, once applied, were not able to go through the process to close the loan and receive the funds. Rosenthal attributed the failure to the complexity of the program and to statutory requirements in the orgiginal TARP legislation that were aimed at much larger financial institutions and which could not compromised.