WASHINGTON — This year saw credit union institutions dedicated to helping lower income members and unbanked communities make innovations and change the way they did business to bring more depth to their efforts.

The National Federation of Community Development Credit Unions saw an opportunity to innovate to help meet the needs of lower income members by creating a secondary market for alternative or nonconforming mortgage loans.

The CDCU Mortgage Center will also help train CDCU staff in offering mortgage financial literacy training to help their members keep up with their mortgages once they have them, the Federation said.

The Federation has partnered with two well-known mortgage firms in this effort. CU Partners and PHH Mortgage Services provide CDCUs with many tools they can use to offer mortgages to low-income members who might need extra help or who can only get mortgages that the secondary market would consider nonconforming.

The center is using $1 million it received from the U. S. Treasury’s Community Development Financial Institutions Fund and low-interest loans and grants it has received from other funding institutions. The eventual goal is to reach $12 million in capitalization and to sell some of the nonconforming loans after they have matured and “seasoned” for a number of years, CDCU Executive Director Cliff Rosenthal explained at the time.

The National Credit Union Foundation also made some changes this year designed to help the Foundation bring more depth to credit union grant making.

The first change has been to cut down on the number of grant making cycles per year, in order to allow the Foundation’s staff to work more closely with grant applicants about their grants and to set up more ways to measure the grant’s success by impact, rather than just by the numbers of members in a given class or the number of hours of financial counseling provided.

The second change has been to accept responsibility for the Credit Union Development Education program, which the Foundation will run going forward. The CUDE program has been called the “boot camp” program in credit union philosophy and approach and has been taken by a credit union leaders from across the industry.

The third, and perhaps biggest, change has been to adopt the management of the REAL Solutions program. The Filene Research Institute started the REAL Solutions program (Relevant, Effective, Asset-building, and Loyalty-producing) about three years ago in response to what it was discovering in its research about what lower income households really needed by way of financial services. Once it was up and running, Filene passed it off to the Foundation.

Unlike other efforts, which have not been as broad, REAL Solutions works less with individual credit unions and more with credit union leagues. The leagues help pick up some of the costs of introducing products and strategies for working with low-income households to their members and are better positioned to know the problems their league members wanted to focus upon. –dmorrison@cutimes.com