The National Federation of Community Development Credit Unions is investigating whether and how it could use a federal bond program to help CDCUs boost their secondary capital by possibly millions of dollars.
The Small Business Jobs Act of 2010 included a provision which allows the Department of the Treasury to guarantee bonds issued for economic or community development. The law allows Treasury to issue up to $1 billion per year in bond authority through Sept. 14, 2014. The minimum bond increments for the taxable instruments would be $100 million, but the guarantees may be structured to last as long as 30 years.
Credit unions that might eventually take part in the program would have to be recognized as Community Development Financial Institutions by the Treasury Department's CDFI Fund.
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