What it Means to be a CDFI

CDFI Overview

CDFI certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing. CDFIs invest in local communities and the residents who live there by providing critically needed financing often unavailable from mainstream financial institutions. CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated institutions like loan and venture capital funds. By building the capacity of a nationwide network of CDFIs, the CDFI Fund works to empower low-income and underserved people and communities to enter the financial mainstream. Learn more through this article by NerdWallet.

Why is GNCU Excited?

As a CDFI, GNCU puts the community first and values local, economic growth. To be eligible for certification as a CDFI, financial institutions must adhere to stringent requirements such as offering services for development, remaining accountable to their main target market, and striving to promote development within their communities. CDFIs invest in local communities and the residents who live there by providing critically needed financing often unavailable from conventional financial institutions.

“Greater Nevada Credit Union is already active throughout our region providing affordable products, free financial education, and direct monetary support to organizations that provide a range of economic and community development benefits. This designation will allow us to look for impactful programs that focus on reaching those disadvantaged and underserved populations who can directly benefit more from accessing our services.” Wally Murray, GNCU President and CEO

 

How CDFIs Use Awards

• The CDFI Fund does not give loans directly to individuals, businesses, or projects. Instead, the CDFI Fund helps to capitalize CDFIs that, in turn, provide financing to their local communities. 
• Once certified, CDFIs are able to apply for the CDFI Fund’s grant, tax credit, and bond programs that are administered annually. After a multi-phased and rigorous competitive review process, only the most highly qualified CDFIs are selected to receive funding through the various programs.
• Through the CDFI Fund’s programs, CDFIs are able to build their organizational capacity to better serve low-income individuals and communities that lack adequate access to affordable financial products and services.
• Here in Nevada, GNCU provides individuals and businesses with personal and commercial banking, financial services and insurance, to promote local growth and economic development.

How the Award Benefits Communities

• Since its inception, the CDFI Fund has awarded more than $2.9 billion dollars to community development organizations and allocated $54 billion in New Markets Tax Credits. The CDFI Bond Guarantee Program has also guaranteed $1.4 billion in bonds to date. These programs have been used to revitalize communities across America.
• CDFIs utilize resources from the CDFI Fund to provide financial products and services to low-income individuals and underserved communities. These resources go towards creating jobs, building infrastructure, developing commercial and residential real estate, and financing homeowners.
• CDFIs help start and expand businesses and create jobs, and they help families buy or renovate homes. CDFIs finance needed facilities and organizations that provide vital services to their communities. CDFIs provide affordable financial services as an alternative to payday lenders and other predatory loan products.
• Specifically, CDFIs finance affordable housing, small businesses, schools, community facilities, health care centers, grocery stores and many other types of investments that spark growth in communities across America.
• Using creative and innovative financing products, GNCU is able to provide loans and financial services to communities where resources are scarce.
• Since becoming a CDFI in 2022, GNCU will help finance projects in that would have otherwise not been possible.

Using Taxpayer Dollars to Leverage Private Investment

• CDFIs are a perfect example of innovative public-private partnerships developed to leverage taxpayer dollars for greater impact in communities across America.
• CDFIs are community-based and know their local markets well, which enables them to make informed decisions on which opportunities to finance for the greatest community impact.
• CDFIs use limited taxpayer dollars appropriated by the U.S. Congress and awarded by the CDFI Fund to leverage even more capital and credit from the private sector, multiplying the impact many times over. Many of the CDFI Fund’s programs require CDFIs to match their awards dollar for dollar with funding from non-federal sources.
• CDFIs create even greater impact by relending capital once a loan is repaid, keeping their awards working in their communities and strengthening the local economic growth.