New Core Platform Helps CUs Reach Underserved Markets
The National Federation of Community Development Credit Unions in New York City announced last week it finalized an agreement with CUSO EPL Inc. in Birmingham, Ala., to develop a shared banking platform, CU Impact.
The platform is expected to help credit unions deliver financial services to low-income members in underserved communities.
The CU Impact initiative will combine the NFCDCU’s expertise and experience in working with unbanked and underbanked consumers with EPL's technology to create a core platform that will support, deliver and measure the impact of credit union products and services for low-income members.
By aggregating the accounting, compliance and processing functions across credit unions, CU Impact is expected to achieve economies of scale for member cooperatives, according to the NFCDCU and EPL.
Each year, 90 million Americans living in unbanked or underbanked households pay more than $90 billion in fees and interest to payday lenders and other lenders outside of the financial mainstream.
CU Impact is expected to enable member community development credit unions to expand affordable banking products and services, and reach more underserved households.
NFCDCU President/CEO Cathie Mahon said in a prepared statement that CU Impact will enable credit unions of all sizes to share and multiply the impact of successful local programs and allow the NFCDCU to focus on product and investment innovations with national impact.
The NFCDCU also announced it received a grant of $599,500 from The W.K. Kellogg Foundation in Battle Creek, Mich., which will enhance the CU Impact platform with the automation of small dollar loans and matched savings accounts.
The CU Impact initiative has been in development since 2013, when Citi Community Development provided financial support and expertise to determine the feasibility of building a dedicated core banking system.
Under the terms of the agreement between the NFCDCU and EPL, the NFCDCU will purchase preferred stock in EPL, and EPL will match the NFCDCU investment in CU Impact on an ongoing basis. A software advisory committee of leading community development cooperatives will prioritize CU Impact software design and enhancements.