The National Federation of Community Development Credit Unions will make an additional $1 million available to help community development credit unions attain enough capital to access other funds.
The U.S. Treasury announced that it will make money from the Troubled Asset Relief Program available to community development financial institutions, including credit unions, that are deemed viable by their regulators. CDCUs that are found to have too little capital to qualify for the program can find other sources of capital that the Treasury Department will match to bring their capital levels up to where they can participate in the program. The National Federation's money will be one source of that additional capital.
Federation Board Chairman Randy Chambers, chief financial officer of Self-Help CU (Durham, NC), commented on Treasury's new initiative.
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"We believe the CDCI program is a unique opportunity for low-income credit unions to rebuild the net worth that was eroded over the past year by the corporate meltdown, share insurance charges, and the troubled economy," he said. "While our resources are limited, we plan to do whatever we can to help our members access these funds."
The Federation has been the primary private-sector provider of secondary capital since 1996, when, through the Federation's advocacy, the NCUA introduced secondary capital exclusively for low-income credit unions.
"We are extremely pleased that NCUA has expressed such strong support for the Community Development Capital Initiative," said Federation President/CEO Cliff Rosenthal. "They have worked with us every step of the way to make this new program accessible to as many credit unions as possible, and their efforts should be praised."
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