WASHINGTON - The U.S. Treasury Department's CommunityDevelopment Financial Institutions Fund reversed course this yearwhen it came to credit unions. Whereas last year the Fund onlygranted just over $1 million to four credit unions or credit unionaffiliated organizations, this year 10 credit unions or affiliatedorganizations received almost $7 million from the Fund. Among thewinners include the National Federation of Community DevelopmentCredit Unions, which received $1 million, the North CarolinaMinority Support Center, which received $500,000, the $12.4 millionLower East Side People's FCU which received $560,000 and theSelf-Help Ventures Fund, which is affiliated with the $174 millionSelf-Help Credit Union and which received $2 million. TheFederation and credit union CDFIs strongly objected last year tothe elimination of the CDFI Fund's Small and Emerging CDFI (SECA)program under which most credit unions had previously applied forfunds. CDFI reinstated the SECA program for 2004's grant process."While we always believe credit unions should be receiving a largerportion of the funding, we are delighted at the improved results ofthis round," explained Clifford Rosenthal, executive director ofthe Federation. "Nineteen CDCUs received awards, as well as fourother credit unions. We were also pleased that affiliates of CDCUsalso received awards, as well as other Federation associates." SixCDCUs received Financial Assistance Awards ranging from $99,000 to$1.42 million, for a total of $3,373,010. In addition to theFinancial Assistance Awards, 14 Federation members also receivedTechnical Assistance Awards totaling $621,445 (maximum size:$78,640), bringing the total CDCU awards of the two Fund componentsto $3,994,455. Financial Assistance Awards can go to many differentaspects of a CDCU's mission, whereas Technical Awards are generallytargeted to a specific technical improvement. Elation was widelyreported among CDCUs about the funding, especially including CDCUswhich have not received money in prior years and viewed the awardas a vote of confidence. "Wow, this is a moment of truth! We'revery excited we got this award!" exclaimed Yolanda Karp, Presidentand CEO of the $2.7 million Hacienda Community CU. "We've acquireda good reputation here in the community, and in all of Oregon, andthese funds will allow us to continue to expand and improve theprograms we've started. This really helps!" The two-year-old creditunion is headquartered in Portland, Oregon and it will use the$99,000 award to continue its work among lower income Hispanicsacross the state. The $24 million School Workers Federal CreditUnion headquartered in Charlotte, North Carolina, plans to use thealmost $58,000 it received to offer Internet banking and onlinedebit cards to their members. "We are very excited and reallyappreciative of the award," said Scales. "We work hard to try to dowhat's right and take care of our members; now we can help evenmore," said Saundra Scales, CEO of the credit union. The $1.7million Buffalo Cooperative Federal Credit Union headquartered inBuffalo, N.Y. spoke to Federation staff about their award of over$22,000. "We're flabbergasted and thrilled to have been awardedthese funds," said Kelly Mauerer, treasurer of the credit union."These funds will allow us to send some of our board members andstaff for training at the Federation's CDCU Institute. We will alsobe able to implement a new and more aggressive financial literacycampaign, upgrade our computer systems and software, and strengthenour micro business program." The Federation will use the $1 millionFund grant to seed a new program designed to help communitydevelopment credit unions make more mortgage loans. "This is atremendous vote of confidence in the power of CDCUs to promotehomeownership in low-income communities," said Rosenthal. "We'regrateful that the CDFI Fund is supporting this effort." TheFederation will use the $1 million to help found the Family HomeFund which will purchase non-conforming mortgage loans from CDCUs,enabling them to make more of them. Over the past five years, theFederation said, credit unions overall sold 42% of the mortgages onthe secondary market whereas CDCUs only sold 7%. "CDCUs play acritical role in building wealth in low-income communities," saidRosenthal. "The Family Home Fund will channel loan capital to CDCUsso they can help more of their members to build wealth in the mostfundamental way - by becoming homeowners." But while the Federationis pleased at the amount of the awards CDCUs received, Rosenthalnoted that the jury is still out on whether the Fund has completelychanged its attitude toward CDCUs. "For example, we don't yet knowhow many CDCUs applied for funds and were denied," Rosenthal said,"and we have heard from CDCUs who were not funded. We are lookingforward to reviewing some of the applications that were denied toget a better idea of what the problems were." -

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