More than 200 credit unions will receive $609 million through Equitable Recovery Program.
The Treasury Department’s CDFI Fund on Monday announced it has awarded $1.73 billion to 601 CDFIs to offset the impact of the pandemic on hard-hit communities.
Those receiving grants under the Equitable Recovery Program (ERP) included 203 credit unions that received a total of $609 million. That dollar amount only was topped by the 264 loan funds that altogether received a total of $615.5 million.
Additionally, the fund announced that 129 banking entities received $513.7 million, while seven venture capital funds received $15.5 million.
“In all, this $1.7 billion investment represents the largest CDFI grant program in history,” Vice President Kamala Harris said, in announcing the awards. “And because these grants are not loans, community lenders do not need to pay back not even a dollar of this investment.”
“This program was intentionally designed to address the needs of communities that are financially underserved and were disproportionately impacted by the pandemic,” explained Deputy Treasury Secretary Wally Adeyemo.
How Will the Funds Be Used?
Treasury officials said that award recipients agreed to spend the funds in several areas:
–222 recipients received $705.6 million to serve Low- or Moderate-Income Majority Minority Census Tracts.
–179 recipients plan to spend a total of $420.6 million serving minority individuals or minority-owned or controlled businesses.
–134 organizations receiving awards will spend $441.5 million serving persistent poverty counties, Native areas and/or U.S. territories.
–40 recipients will spend a total of $99.7 million to serve small businesses and farms.
–28 of the organizations receiving awards will spend $67.6 million to increase the dollar volume of financial products closed and grants made by their organizations in ERP-Eligible Geographies.
The 603 recipients are headquartered in 44 states, the District of Columbia, Guam, and Puerto Rico.
CU Group Hails Awards’ Potential
Inclusiv President/CEO Cathie Mahon said that the ERP will be “transformative” for CDFI credit unions and the communities they serve.
“This flexible funding will not only increase access to high-quality, affordable financial services and loans in low-income communities and communities of color but will also help CDFI credit unions invest in the systems, technology and staff needed to ensure sustainable growth,” she outlined.
Mahon added she was particularly pleased that 69 Inclusiv members in Puerto Rico will receive a total of $225.9 million—the largest external capital injection in the history of the cooperativas, the credit unions guaranteed by the island government.
“This historic award will exponentially increase the financial cooperativas’ capacity to continue the rebuilding of communities impacted by climate change, disinvestment, and neglected by the financial mainstream,” she said.
Learn more about CDFI Certification and the various awards opportunities it could offer your credit union by reaching out to our team today!