Bank of America will make $10 million available for deposits in community development credit unions across the country, according to the National Federation of Community Development Credit Unions.
The money was placed with the National Federation's community development investment program for distribution. The investment will be placed as deposits in credit unions across the country to provide financial support for lending and balance sheet management, the National Federation said.
The federation also called the investment the single biggest private-sector investment ever in CDCUs.
The National Federation has roughly 237 CDCUs as members.
"Bank of America has long been the federation's largest investor among financial institutions, with investments both in our deposit program and our CDCU Mortgage Center,” said federation CEO Cliff Rosenthal. "We are delighted that they have decided to dramatically increase their support for CDCUs amid a recession that continues to take a heavy toll on the low-income communities they serve."
Dan Letendre, senior vice president at Bank of America, discussed the investment. "Our commitment supports the valuable work and services that community development credit unions provide to millions of low-income consumers. Now more than ever, these credit unions fill a gap in providing financial services in underserved communities, and Bank of America is delighted to partner with the Federation in bringing a significant amount of capital to this market.”
"Bank of America's commitment will enable us to channel capital to CDCUs at a lower rate than we've been able to offer in the past," Rosenthal said. "We will be able to offer terms from one to five years to our credit unions, which will be especially valuable in enabling them to better manage their assets and liabilities."
Rosenthal explained this was because the bank had committed to the investment for five years.
Rosenthal said that a CDCU would have to have been designated as a low-income credit union to be able to access the nonmember deposits but that most of the National Federation's member credit unions had already received the designation.
In related news, the National Federation also announced that the Ford Foundation had made a $2 million investment in CDCU secondary capital.