Three community development credit unions in California have received $1.25 million in interest-free deposits from CUNA Mutual Group to aid in their work in underserved areas in California.
The insurer made the deposits through the California Department of Insurance’s California Organized Investment Network. The COIN program has spurred insurer investment in underserved and rural communities throughout California by providing modest tax benefits and fair returns to investors since 1997, the insurer explained.
The three community development credit unions each received one or two deposits of $250,000 and have the discretion about where to spend the investments in their areas to encourage community development. In return, CUNA Mutual Group and other investors in the program receive tax credits for their participation.
The three credit unions participating are Northeast Community FCU, San Francisco; Faith Based FCU, Oceanside, Calif.; and the California operations of Self-Help FCU, an affiliate of Self-Help Credit Union, Durham, N.C.
“This pilot program for CUNA Mutual Group is a win for everyone involved,” said Cami Douglas, vice president, Corporate Tax, CUNA Mutual Group. “It helps us live out our mission of helping credit unions and their members and gives credit unions the opportunity to provide loans or other support to small businesses and non-profits in economically disadvantaged communities.”
In a press release, California’s insurance commissioner, Dave Jones, called out several insurers and financial institutions for their participation in the COIN program.
“Today, we thank UnitedHealthCare, Blue Shield of California, CUNA Mutual Group and CSE for stepping up to the plate and making major community development investments,” Jones said.
The COIN program allocates $2 million annually in tax credits to support $10 million in community development investments. Under the COIN tax credit program, investors invest a minimum of $50,000 as equity or a zero-interest loan with a Community Development Financial Institution for 60 months. In exchange, the investor receives a state tax credit.
The CDFIs use these funds to fulfill their mission, by providing loans or other support to small businesses and non-profits that serve economically disadvantaged communities. After 60 months, the loans are repaid, CUNA Mutual said.