Money from the U.S. Treasury Department's Community DevelopmentFinancial Institutions Fund's latest round of funding will helpcredit unions offer members alternatives to high cost payday andauto loans, improved savings options, financial education and loansto bring fresh food into neighborhoods that currently do not haveany, according to the CDFI fund and credit union executives.

The CDFI fund has announced almost $20 million in grants tocommunity development credit unions and credit union organizations,according to the National Federation of Community Development Credit Unions that tracks the grants.

The federation reported that credit unions received 12% of theCDFI's overall grants during the latest round and that 83% of theCDCUs that received money were National Federation Members (seesidebar).

The National Federation received a grant of $1.4 million that itwill use to support programs with its member credit unions, whilethe Support Center, an organization that works with CDCUs in NorthCarolina, received $953,000 and two organizations that work with Native American CDCUs, the Bois ForteBand of MinnesotaChippewa, and the Lakota FCU steering committee received $74,000and $147,000, respectively.

Pamela Owens, interim CEO at the National Federation,celebrated the grants and pointed out that they are part of anongoing tradition of CDCUs making the most out of their CDFI grantmoney.

“A recent study released by the CDFI fund shows that CDCUsmobilize $10 in community assets for every dollar of capital, whichis more than any other type of CDFI,” Owens said. “We've known thisfor a long time, but were pleased to see the power of cooperativefinance recognized by the CDFI study.”

Many of the recipients had received CDFI grants before.

Communicating Arts Credit Union in Detroit, Mich., was given agrant of $953,806 this year, and CEO Hank Hubbard noted through theNational Federation that the Detroit community has benefitedgreatly from the CDFI fund in the past.

“These grants allow us to reach out further into theimpoverished areas of Detroit that other legitimate lenders cannotor will not go,” Hubbard told the National Federation.Communicating Arts also received a CDFI grant in 2011. “The 2011funds allowed us to refinance predatory car loans for approximately100 people, saving them an average of $80 per month,” Hubbard said.“That's a total savings for the group of over $400,000 through thelife of the loans.” And the benefits continue to grow. “As themembers pay the loans back–we can lend it out again,” he added.

Another recipient, ASI Federal Credit Union, headquartered a New Orleans suburb,received money under the CDFI program as well as money under theHealthy Food Financing Initiative, which the CDFI fundadministers.

ASI received just over $1.45 million from the CDFI fund and $2million in HFFI funds. ASI CEO Mignhon Tourne reported that theCDFI money will continue to support the credit union's smallbusiness loan programs and that the HFFI money would do somethingsimilar but in the food field.

Tourne explained the credit union was using money from the HFFIinitiative and from a similar program from the state to support afood cooperative in the Upper Ninth Ward, an area of New Orleansstill struggling after Hurricane Katrina.

ASI is one of only 12 financial institutions and otherorganizations in the country eligible for the funding underHFFI.

She also reported that ASI is approaching the end of its firstyear as lending partner for Kiva.org, the organization that allows individual donors tofund individual small business loans around the world.

Tourne reported that the credit union has underwritten andfinanced roughly 39 of the small business loans so far for Kiva forabout $345,000. The credit union initially underwrites, funds andservices the Kiva loans that the organization's donors then backfill.

Tourne reported the loans have created 35 jobs and preservedmore and that 66% of them went to women-owned businesses and 89% tominority-owned businesses. Ninety-two percent of them went to lowerincome members.

The loans have 10% delinquency rate but only a 2% default rate,Tourne said, adding that the credit union didn't consider even that2% lost. “We have a very talented and creative collection team atASI, which is always reaching to those members to help them find away to bring their loans current,” she said. “We don't count themout.”

But not all credit union CDFI recipients were old hands on theprocess. Sandra Lumbley, CEO of the Kerr County Federal CreditUnion in Kerrville, Texas, told the National Federation that theCDFI money would go to help her credit union members escape thetrap of high-cost payday loans.

“Our credit union is dedicated to serving the underserved,”Lumbley said, “and this grant will be put to great use in ourcommunity.” The grant will be used to increase specialized lendingthat helps low-income borrowers to break free from predatorylenders. “We serve many members that traditional financialinstitutions can't or won't,” she added. “Our loans help people whobelieve that high interest payday and title loans are their onlyoption.”

Some of the CDFI money went to help credit unions becomecertified as CDFI's. Jeanne Kucey, CEO at the 16,000-memberJetStream Federal Credit Union of Miami Lakes, Fla., said the bulkof the $93,000 her credit union received will go to help it becomerecognized as a CDFI.