What is CDFI? | My Site

More than a designation: we have always been a CDFI at heart, as evidenced by our work and care for our community.

Connections Credit Union has been serving the communities for many years, and our status as a CDFI is an official recognition of the United States Department of Treasury. Thanks to our CDFI certification, we are now a specialized financial institution serving low-income communities.

To earn the CDFI certification, connections had the to meet the following criteria:

1. Have a primary mission of promoting community development

2. Provide both financial and educational services

3. Serve and maintain accountability to one or more defined target markets.

4. Maintain accountability to a defined market.

5. Be legal, non-governmental entity at the time of application

Today, our CDFI Certification opens the door to new opportunities for Connections Credit Union to excel—both operationally and financially.

What is a CDFI?

Community Development Financial Institutions, are a community-based, non-profit or for profit financial institutions. The CDFI mission is to provide fair responsible financing to the underserved, and distressed communities.

In 2022, Connections Credit Union received the CDFI designation.

CDFI's role in promoting economic development in underserved communities includes:

ALLOW ACCESS TO CAPITAL

CDFI's aim to bridge the gap in access to capital for individuals and businesses in underserved communities. They provide loans, investments, and other financial products to support affordable housing, small businesses, community facilities, and other projects that contribute to local economic growth.

TARGETED LENDING

CDFI's often have a mission-driven approach, focusing on specific underserved populations or geographic areas. They tailor or develop products and services to meet the unique needs of these communities, incusing low-income individuals, minority-owned businesses, rural areas, and distressed neighborhoods.

FINANCIAL INCLUSION

CDFI's work towards promoting financial inclusion by providing basic banking services to individuals who may be unbanked. CDFIs goal is to offer affordable checking and savings accounts and any financial tools to help individuals build assets, establish credit, and improve their financial well-being.

FINANCIAL EDUCATION

CDFI's go beyond providing financial products. They often offer training, technical assistance, and financial education programs to help individuals and businesses improve their financial literacy, develop business plans, and enhance their chances of success.

COMMUNITY DEVELOPMENT

CDFI's address the broader social and economic challenges faced by underserved communities. They Collaborate with local stakeholders, nonprofits, and government agencies to support affordable housing, community facilities, health care centers, schools, grocery stores, job creation, and other initiatives that contribute to community revitalization.

Benefits of CDFI Certification

CDFI's are eligible to apply for grants from the CDFI fund to expand services to financially underserved communities (capital grants up to $1 million; Technical Assistance grants* up to $125,000 as of 2020).

Any credit union may apply for a CDFI Technical Assistance grant before certification, but they must have the ability to become CDFI-certified within three years of receiving the grant.

CDFI's have access to additional training resources.

Membership in a learning community of like-minded credit unions.

CDFI's are exempt from the National Credit Union Administration’s (NCUA) member business lending cap.

CDFI's have limited exemptions under Consumer Financial Protection Bureau (CFPB) Qualified Mortgage and Ability-to-Pay rules.