NCUA Webinar: CDFI Certificatio​n – More Than One Way to Get There (6/13/2016)​

Vanessa Lowe: Hello, everyone, and welcome to our webinar today. My name is Vanessa Lowe. I’m an economic development specialist with NCUA’s Office of Small Credit Union Initiatives. As you can see, today’s topic is Community Development Financial Institutions Certification
– More Than One Way to Get There. We’re going to have a really great webinar today, but let me start with some of those administrative announcements that we like to give you, so that you can have the best experience with the
interface that we have here. First, is adjust your computer volume as needed, so that you can hear us as clearly as possible. To make your screen larger, you can drag the bottom right corner to resize the slide view. Allow pop-ups. That seems to help, and also remember, throughout the webinar you can send us questions. As a matter of fact,
we’ve even gotten some questions already. Use the Ask a Question tool on your screen, and then you can write those questions to us. The first hour is all presentation. The last half hour of the 90-minute webinar, we will be asking those questions of our guest speakers. The other thing about the questions is we have
a lot of guest speakers today. They’re all wonderful, so pay attention to the names They’re going introduce themselves. When you send your question, start it with Josh, Diane-whoever is speaking. Let us know who you want to ask a question to, because we’re trying to organize them by folder. Near the end, before we get to the Q&A, you’ll see a link
that we’ll put on your screen, and that will be the survey, so you can give us feedback on this. We’ll try to keep that available for you for a minute or so. In three weeks, as always, we make the webinar available in our archive as closed captioning. Spread the word about it. If your friends couldn’t make it today, then they can
join us next time when we create the archive. All right, so let’s move on and let’s also do the NCUA disclaimer. Remember that this webinar, like all of our webinars, is offered for information and educational purposes only. NCUA does not endorse any particular credit union or vendor
or their employees, products, or services. Okay. We like to give you some pictures of faces to go along with the voices you’re going to hear. I’m Vanessa Lowe. I just introduced myself. I’ve been with NCUA for about nine years, and before that I was actually with the CDFI Fund who is partnering
with us on this particular webinar. I’m really excited to be involved in this one. We have a series of speakers, like I said, both from the CDFI Fund and also from NCUA, but also we have four credit union representatives, so we’re going to talk about their experience with the CDFI Fund
services, and CDFI certification.. Let’s start with our first poll. Okay, so the question is, what is your credit union’s asset size? You’ll click the single option that tells us which asset size corresponds to your credit union. It goes from less than $1 million down to more
than $500 million. For each poll, there is a not applicable option, in case you’re not with a credit union or otherwise can’t answer that question. Okay, so everybody click your answer there, and let’s see how those responses look. It looks like we’re still getting some responses. Right now it looks like our
sweet spot is $10 million to less than $100 million. That’s a common area for us, and so we welcome everybody on here. We hope you get a lot out of this webinar. Here’s what we have on our agenda. First, a lot of people hopefully have seen the press release that went out about the partnership between NCUA and
the CDFI Fund. We’re calling it the NCUA CDFI Fund Treasury campaign, and so we’re going to hear about that and the latest movement on that project. Then we’re going to have somebody from the CDFI Fund talk about the benefits of becoming a CDFI. Again, a CDFI is a community development financial institution. Then we’ll
have Pam Williams who will talk through the two different ways when we talk about there is more than one way to get there in terms of being certified. She’ll talk about essentially the special credit union application process and how it differs from the standard application process. Then we will have Diane Rector
here interviewing four different credit unions. We’ll get to hear their brief profiles of their experience, again, with the CDFI Fund. As we said before, that last half hour is for pure Q&A. All right. Without any further adieu, I’m going to turn it over to Pamela Williams. Pamela, tell us about yourself. Pamela Williams:
Thank you so much, Vanessa. In my role as Partnerships and Outreach Coordinator with the Office of Small Credit Union Initiatives, under the partnership part of my role, I work with other federal agencies and non-profit organizations that have resources available to credit unions. I help credit unions to understand what those
resources are and help promote those resources to credit unions. As well as help the organizations better understand and target their products and services to credit unions, particularly those that serve low income individuals and those that are small, which is the sweet spot of the assets that we saw in terms
of those of you who are on the line today. Enough about me. What I’d like to do next is find out a little bit more about you. We’ve got a second poll question—Who’s on the call?” Do you represent a credit union, a credit union league, state supervisory authority, a credit union
trade organization, or other type of organization? Please fill in the appropriate dial so that we can help get a better understanding of who we have with us today. All right. Vanessa, are we getting enough-oh, we see that- Vanessa Lowe: I think we’ve got our responses. Pamela Williams: Yes, and so
we’ve got-does that say 80%? Vanessa Lowe: Eighty-eight percent, eighty-nine percent, really. Pamela Williams: Eighty-eight percent credit unions on the call, so we’ve got the right audience, and so we’re ready to go. Next, what I’d like to do is turn to a video clip from
the CDFI Fund Director Annie Donovan. Annie Donovan: Hello. I’m Annie Donovan, the Director of the Community Development Financial Institutions Fund at the U.S. Treasury Department. A few months ago, the CDFI Fund signed a memorandum with NCUA
to allow us to partner in an effort to get more low income credit unions certified as CDFIs. I want to thank the NCUA board and the NCUA team for committing to this effort. Why does the CDFI Fund want more credit unions to become certified? Because it’s mission critical for us to expand
access to financial products and services in communities that need them most. Credit unions expand financial inclusion. It’s of great importance to the Treasury Department to create an inclusive economy where every citizen has access to the tools they need to prosper, tools that credit unions have been providing
to their members for decades. But that’s not all we seek to accomplish. We want low income credit unions to utilize our resources to create community transformation. Let me give you an example of what I mean. The MariSol federal credit union in Phoenix, Arizona because certified as a CDFI several years ago.
Robin Romano, MariSol’s president, told me how they discovered the value of being a CDFI. It wasn’t just about the access to funding that resulted. When Robin looked into becoming a CDFI, it caused her to examine more carefully her low income members, to assess their needs, and to create products
and services to meet them. Once MariSol became certified as a CDFI, she called up every other CDFI in the Phoenix area and asked them what they did. She found a whole new community of practitioners that she didn’t know about that shared a common mission and had complementary product and service offerings. She created
new partnerships, such as one with Phoenix Neighborhood Housing Services to offer high loan-to-value mortgages to low wealth families. She used CDFI Funding to back the loans. That’s transformation. That’s what we want to do more of with this initiative-for credit unions to see more potential in their low income
members, to design products that help them build financial capacity so that they can pursue their dreams. That’s the mission of the CDFI Fund in action. Our CDFI and NCUA teams have worked with great diligence and commitment to streamline our certification process and make it easy
for you to become certified. I hope you will consider becoming a CDFI. Thank you. Pamela Williams: Okay. Continuing on with our relationship with the CDFI Fund, earlier this year CDFI Fund Director Annie Donovan, pictured here on the right, with the then-Director
of the Office of Small Credit Union Initiatives, Bill Myers, pictured on the left, re-signed the agreements between NCUA and the CDFI Fund. The CDFI Fund is one of our long-term partners. We’ve had an agreement in place with them and a cooperative working
relationship for the past 13 years. Earlier this year the renewal of that agreement set in motion the biggest and most ambitious initiative we’ve ever ventured on with them or any other partner. That is, we’re looking to double the number of
credit unions that become CDFIs by the end of this year. As of the end of the year of 2015, there were 265 credit union CDFIs, and so that’s our target for the remainder of this year. One of the things that we are really seeking to do is
with the large amount of data that NCUA routinely collects from credit unions. I feel like I see a collective nod from the 88% of you that are out there-with the amount of data that we collect, we really made a case to the CDFI Fund and to the Treasury
Department that we needed to figure out a way of leveraging that data to make it easier for credit unions to apply for CDFI certification, and that’s just what we did. Later on in the presentation, we’re going to tell you specifically what the results of that goal and our
collaboration and the results of that and how we think that’s going to translate into success for you. Next, we’ve got another poll question. Just before we introduce the CDFI Fund staff to tell you about the CDFI Fund, we want to know a little bit more about how you. Consider your
current knowledge of the CDFI Fund. Do you think you’re very knowledgeable, knowledgeable, or that you have limited or no knowledge of the CDFI Fund? Let us know how you would rank your knowledge. All right. Yet again, it seems like
we’ve got a lot of you on the line that really could benefit from this presentation, which really will focus on what is the CDFI Fund, what are the benefits of having the CDFI designation, and then
what are the methods that you can use to become a CDFI. With that, I’d like to start with this video clip that we have about three credit unions and their different perspectives and motivations for becoming a CDFI. It was the best of times. Female: To watch these people move out of being homeless and transitioning to having their own homes, it’s a good feeling that you get from it.
It was the worst of times. Ynette Gibbs: We were in a state of turmoil when our plan sponsor shut their doors without warning and laid off over 500 people. It was the age of wisdom. Female: Applying for the certification really was more about what if we didn’t take on the certification and what
resources would we be missing out on if we didn’t try. And the spring of hope. Ynette Gibbs: The greatest benefit is seeing three generations change. That to me is the heart of credit unions. This is the tale of three credit unions and
their CDFI story-the Community Development Financial Institutions Fund. Ynette Gibbs knows first hand the value of CDFI Funding. It was a lifesaver when her credit union’s biggest sponsor shut down with no notice, but her credit union board
said no way. Ynette Gibbs: Our board was already looking for innovation and expansion. It wasn’t a need to convince. It was more an opportunity of seeing an alternative to not surviving. CDFI was a way for us to expand into areas that would ensure our survivability. Newrizons
Federal Credit Union has received CDFI funding three times since 2002, with the goal of helping those who could not help themselves in the tiny coastal community of Hoquiam, Washington. The help included assisting a growing Hispanic population and others who are chronically under or
unemployed. Ynette Gibbs: Providing loans to people that, with their credit scores, would never be something that you could provide a loan to because they were far too risky. Those things together meant that we could make a real impact in our community to make people more financially viable, better
employees, and we work with small entrepreneurs to actually build a bigger job pool. The pride they have in their-I’m going to get all emotional-the pride they have in themselves changes, and it’s contagious. Vanessa Lowe: Okay, and before we move forward, I want to apologize if you
were getting some feedback. For our speakers who are calling in, remember to mute your computers because the sound from your computer is coming through to the live audience. We apologize to everybody for that, but hopefully you heard most of that wonderful video that gives you a little bit of a snippet of credit unions that have
experienced working with the CDFI Fund. I’ll turn it back to Pam now. Pamela Williams: Thank you. Now that we’ve heard from those three credit unions – their motivations and what their goals were for seeking CDFI certification, we’d like for you to hear officially from the CDFI Fund about the benefits of CDFI certification, Dave. David
Scherler: Thanks so much, Pam. I am David Scherler. I’m a Senior Portfolio Manager on the CDFI and Native Illnitiatives program team. I’ve been with the Fund for nearly eight years now. I’ve done some policy work here and there, but most of my eight years here have been spent on the CDFI and Native Initiatives program
team, which you’ll hear a little bit more about in a few seconds. To talk a little bit about my role, I help with a lot of the outreach to our funding round applicants. I help manage the application review process, as well as help awardees understand some of their post-award requirements. Before I get into my spill, I just wanted to say
that the NCUA has been such a terrific partner to the CDFI Fund over the years. I always look forward to working with Pam and her team, so I’m excited to be here today. Okay, so I’m going to talk a little bit about some of the benefits that come with being a certified CDFI. Before I do that,
I think we should quickly touch on what CDFI certification actually is, since we’ve talked a little bit about it, generally, but we should mention exactly what we mean when we talk about CDFI certification. Let me add just a little bit of context but Michelle, actually,
will get into more detail in a few minutes. CDFI certification is a designation defined by our agency, the CDFI Fund, that designates an organization to essentially be a mission driven lending institution that has financing activities focused in one or more low income communities. Right,
so that’s what it is. Certification is important because for many of the programs-the programs that you see on this slide and we’ll get into in just a minute-being certified is a critical requirement, meaning you have to be certified even to apply to those programs.
In many ways, certification can be seen as a gateway to our funding programs. Okay, so an organization becomes a certified CDFI, and then they have access to funding programs, but what are those programs? You see three programs here on this slide-the
CDFI program, the Native Initiatives program, and the Capital Magnet Fund program. Right away let me just say that the CDFI program and the Native Initiatives-they are nearly identical, the one caveat being that for Native Initiatives, that program is specifically for Native CDFIs, so those are CDFIs
serving native communities. Otherwise, just knowing that, I can talk about the award programs under those two programs together because they’re the same. Those are three programs you see there-FA awards, HFFI awards, and TA grants. Let me quickly explain some of those. Our FA awards, which stands
for financial assistance-those are probably our most sought after awards, as they provide up to $2 million to certified CDFIs for activities that fall into one of the following eligible activities-financial products, financial services, development services, loan loss reserves, and capital
reserves. You can use those awards for a number of different uses. Our HFFI awards are similar. That stands for healthy food financing initiative award. Those provide up to $5 million to certified CDFIs for the same eligible activities as FA, the difference there being that the activities ultimately must
support healthy food retail projects in food deserts located in a CDFI’s target market. Those go specifically to help finance healthy food activities. Lastly, we have our technical assistance awards which are, on the other hand, a little bit different. They provide up to $125,000 under the CDFI program
and $150,000 under the Native Initiatives program. TATATA awards are a capacity-building grant. It can be used for a number of discrete eligible uses like staff salaries, training events, travel, and other professional services. TA awards are meant to help CDFIs build their own
capacity, like I said, so build capacity as an organization to serve their target markets. They also help organizations become CDFIs. In fact, you don’t have to be a certified CDFI in order to apply or receive a TA award. That’s like a good stepping stone for folks trying
to get into the life cycle of the CDFI Fund program. You can apply for a TA before you’re certified, but just know that if you’re successful and you receive a TA award, you will agree to become certified within a two-year time period. That’s a good overview of the CDFI and Native
Initiatives program that I work primarily on. We also have the Capital Magnet Fund, and that provides awards to certified CDFIs, as well as qualified non-profit housing organizations to help finance affordable housing activities as well as economic development and community facilities. Awardees used
those funds to create financing tools for loan loss reserves, revolving loan funds, risk sharing loans, and loan guarantees, but again that’s all going to affordable housing and community services. Okay, so we just talked about some of the programs that provide direct funding,
but we have two programs we want to highlight really quickly today that provide sort of indirect funding for CDFIs. CDFIsCDFIs Those two programs are Bank Enterprise Award program. That’s the BEA program. The BEA program provides monetary awards to FDIC insured banks and
thrifts who have invested in or supported CDFIs or to residents and businesses in our most highly distressed communities. Then we also have the Bond Guarantee program, which is one of our newest programs, which provides large scale business lending CDFIs the opportunity to borrow capital
from the sale of bond proceeds for long term community investments. I just wanted to give a quick high level overview of those two programs. Okay. One of the last things we wanted to highlight that’s available to certified CDFIs or just to CDFIs in general, is the capacity
building initiative. The capacity building initiative-you see that in that red dot there. It’s one of my favorite programs here at the CDFI Fund. It doesn’t offer funding but it does offer one of a kind highly specialized training series and technical
assistance to CDFIs and organizations looking to become CDFIs. The capacity building initiative houses all of these very unique specialized individualized training series that are developed and delivered specifically for and to CDFIs doing a wide range of activities all
around the United States-sort of a one-of-a-kind thing. We’ve achieved a lot of impact through the CBI, so we’re super happy about it. Just to give you a flavor of some of those training series, let me just run through three of the names to give you a sense of the types of trainings the CBI
can do. The three recently we wanted to highlight are Expanding CDFI Coverage in Underserved Areas, so how can CDFIs get into more underserved areas— Financing Community Help Centers, how can CDFIs play a bigger role in getting community health centers up and going-and
Building Native CDFI Sustainability Impact, so how can we grow native CDFIs and help them leverage resources in their community. Okay, so again note the quick overview of our programs and what CDFIs have access to. I wanted to ask a question-so what types
of institutions are applying or accessing these programs? Well, if you look at the universe of certified CDFIs by institution type, you’d see that the majority-about 52%- are actually loan funds. Credit unions make up about 27% of certified CDFIs. They’re followed
by banks and thrifts at 20%, and then our smallest cohort is the Venture Capital fundsfundsfunds which are just about 1% of certified CDFIs. Nearly all of our programs are competitive, but, if we can focus on the CDFI Native Initiatives program as an example-again, this
is the program that I work on specifically-the CDFI Fund has a good track record of being able to make awards to all institution types in proportion to the applicant pool, which is to say, for example, if 10% of all applicants are credit unions, we’ve sort of done well
to make sure that 10% of all awarded institutions are credit unions. You can see that on this slide over this three-year period-2013 to 2015-the number of credit unions that received CDFI program awards are a lot less than the other institution types. Really, what
we can take away from that is that the number of awards for credit unions is tied to the number of applications from credit unions. If we want awards to credit unions to increase, one way we can help facilitate that is to make sure that more credit unions are getting involved in our process
and applying. Pam, I think that’s a good tieback to this initiative-that’s one of the reasons why we’re talking about certification is to get ultimately more applications from credit unions. Pamela Williams: Absolutely. When I look at this slide and then the one that you’re going to
show next, is the number of the distribution for the past couple of years by the award amount. To me, it shows the opportunity for credit unions. If you think about the 52%, I think you mentioned, of the composition of CDFIs now are loan funds, then
the next grouping was about 20% for credit unions. Again, all of that opportunity-and it just plays out in your historic funding levels. One of the things that we really want credit unions on the call to know and to be encouraged
by is that CDFI funding is a gateway for you to create the community transformation that Annie Donovan talked about in her introduction. The funding levels that are available for credit unions that are embarking on growth
strategies, CDFI certification is the gateway to that level of access to funding to support those kinds of initiatives. Thank you, Dave. Was there anything else that you needed to cover? David Scherler: No. I think that’s it. Thanks, Pam. Pamela
Williams: Thank you. What we would like to do now is roll through a clip of just scrolling through the names of credit unions that are already CDFIs. Two takeaways I think from this scroll is that one-you may recognize the name
of a credit union that is a partner or a credit union that you work with closely in your area, or that— wait a minute. We’re just having minute to scroll through. We’re going to get the video on-but recognize the name of the credit union that
you’ve worked with or that’s local to your community. One of the other things that we wanted to do for the takeaway is for you to take a look at the diversity of credit unions in terms of their asset size. Those are the dollar amounts that you see in the
far right column. Again, looking at the size and the diversity of credit unions, the really large credit unions— over $100 million-a good bit of them are between that $10 million and $100 million in our audience. Then there’s also a
wealth of those that are below $10 million. Michelle Dickens from CDFI Fund, I know you’re on the call. Michelle, tell us about the competitiveness of CDFI certification and whether or not that’s a factor in whether or not the CDFI Fund will award a CDFI
designation. Michelle Dickens: Sure. Thanks, Pam, for the question. CDFI certification is a non-competitive application. We can certify as many applications that meet the criteria regardless of, let’s say, geography or tax status or asset size or anything
else for that matter. It’s open to anyone who can really meet the certification criteria and then go forward in our process. Pamela Williams: Thank you, Michelle. Next, what we’d like to do is take a poll because we’re starting to get into the section on the
actual specific methods of applying for certification and telling you more about certification in general. One thing I want to say before we go into the poll is that we are using a lot of acronyms. We’re from the federal government, so of course we would.
For the acronyms, under the resource list widget-that’s the green tab on your console-one of those resources should be a list of acronyms and it’s under the title of CDFI Fund Program Descriptions. As you’re
looking at the PowerPoint slide following the video, I think we’re trying to do a good job of actually saying the long name of the acronym, but if you need to refer back post-webinar, feel free to use that. These are the most common
acronyms that we’re using. With that, let’s go to our third poll question, I believe it is. Is your credit union a low-income designated credit union? Please answer this whether or not your designation is from NCUA or from your state supervisory authority. We’ll just give you a couple of minutes.
For those representatives from non-credit unions, please answer not applicable, and if you don’t know, let us know that as well. Vanessa Lowe: All right. Before we go any further, I want to jump in and remind folks that you should be submitting your questions. Remember, preface your question with the person you’re asking the question to. That will help us
a lot. The other thing is I saw that a couple of people had asked where do we get the slides for this webinar? It’s also in that green widget. You’ll find three things in that green widget-Download Slides, Online Resources-and you will see a list of a couple of those at the end that are really great to give you a little more background-and also
the CDFI Fund program description, so those acronyms that she talked about. Pamela Williams: All right, so how did we do in our poll? It looks like 73% are low income designated credit unions. Awesome. That’s exactly I think as we get into the actual methods, those of you who are low
income designated credit unions, we really do have a special message for you, and so excellent that you’re going to be able to hear all of that coming up next. Before we get to that, though, I’d like for Michelle Dickens of the CDFI Fund to tell us a little bit about herself, her role at the CDFI
Fund, and then more about the requirements for becoming a CDFI. Michelle? Michelle Dickens: Great. Thank you, Pam. Good afternoon. My name is Michelle Dickens, and I am a Senior CDFI Certification and Compliance Officer here at the CDFI Fund. I have been with the CDFI Fund for nine
years, primarily focused on CDFI certifications. I also provide compliance support for the unit. I would just like to echo David’s sentiments and thank NCUA for partnering with the fund on this special and important opportunity. My role today is to briefly cover the CDFI
certification criteria, because we could talk at length about each of the criteria, and to assist NCUA in answering all questions related to the process. Let me go ahead and jump right in. The CDFI Fund certifies mission driven organizations that can demonstrate their ability
to meet a total of seven CDFI certification criteria at the time the application is submitted. Looking at these first four criteria, the applicant organization must demonstrate that it is a legal entity, it has documents to support that its primary
mission is that of promoting community development, it is a financing entity; it primarily serves one or more Target Market as defined by the CDFI Fund. Let me briefly explain or describe Target Markets. There are two types of Target Markets-investment
areas and targeted populations. The geography-based Investment Area meets one or more distress criteria and has significant unmet needs for financial products and services. Within targeted populations, there are two distinct types based on
the characteristics of the borrower. The first is Low Income Targeted Populations where individuals whose family incomes meets a certain threshold can qualify. The second type is of targeted populations is called Other Targeted Populations. I know it
sounds a little weird, but it is called Other Targeted Populations where the groups share the same characteristics and also lack adequate access to capital and financial services. That is it in brief. The last three criteria the applicant must also demonstrate
that it meets is that development services are connected to the financial products that they provide. It doesn’t have to have one for each type of product, but they should be something that connects the borrower to the product. It must maintain its
accountability to a Target Market through a governing board or an advisory board. All seven of these criteria need to be met, so it’s an and test, not an or test, but it is not a government entity or a instrumentally of the government-not working
on behalf of government agency. That’s basically it, that’s all seven criteria in a nutshell, but let’s take a quick peek into how a credit union jells nicely with becoming certified as a CDFI. This brief slide shows that all credit
unions are deemed to meet legal entity and financing entity criteria just by the virtue of being chartered, active, and regulated. Credit unions are generally deemed to meet the development services, accountability,
and non-government entity criteria. The CDFI Fund provides a great deal of guidance on our website-if you haven’t taken a look at our website-regarding information needed to demonstrate that the criteria can be met or are being met.
Pam, I think now is probably a good opportunity for you to explain how the low income designation by NCUA supports CDFI certification requirements. Pamela Williams: Great. Thanks, Michelle. One of the things I want to remind our
participants is that under the resource list widget there is a link for a CDFI certification video. It’s the video that we recorded with the CDFI Fund last year going through the process of becoming a CDFI. It’s customized
to credit unions. The message is still relevant for credit unions that will be applying under the standard application. What Michelle was going through just a moment ago was just a very brief overview of the certification requirements. For more detailed explanations,
particularly detailed explanations about completing the application, we’ll definitely want you to click on the link for that video. I’m going to refer to it and tell you a little bit more about that, but I wanted you to understand that there are online resources for you to get more
information other than this high level presentation that we’re doing today. With that, again, earlier I mentioned that NCUA routinely, as a regulator, gets a lot of information and data from credit unions, and particularly for low income designated credit unions, since
that’s the designation that NCUA confers. We have a lot more information about those credit unions in our qualification process of the low income designation. Because of that, we think that the low income designation really overlaps-and to use
Michelle’s words-it overlaps very nicely with the [CDFI] Fund’s primary mission requirement for CDFI certification-the emphasis on low income in terms of the low income designation. It’s the emphasis on the majority of the membership being low income
individuals and members, and with the CDFI Fund there is that synergy that overlaps in part of our negotiations and work with the CDFI Fund to come up with a streamlined method for CDFI certification. That’s one. The second area is in target
markets. In data that we routinely analyze for the low income designation, we also think that that data contributes towards a credit union being able to demonstrate that it meets the Fund’s target market requirement, and so we are going to be
using that data as well. Those are the two overlaps. The graphic here is the cover sheet of the new Special Credit Union Version of the CDFI Certification Application. This is the result of the work between the CDFI Fund and the Treasury Department
and NCUA and what we’ve actually been looking for to streamline the process for most of you. Next slide, please. The two methods now for a credit union to become certified are to use the standard traditional application-the
one that’s available on the CDFI Fund’s website-and there’s no process or change to that application— or to use the special credit union version. For the special credit union version of the application, the eligibility
requirements are that a credit union be federally insured, that it have the low income designation, either by NCUA or its state supervisory authority, and that it also use the Investment Area Target Market. Remember, the
Investment Area is the one that Michelle described as geography based. A credit union that answers all three questions affirmatively would be eligible for the special credit
union application. Let’s look and see what that will entail. Under that process, NCUA will actually analyze the loan information and membership information that it already collects from low
income designated credit unions and will identify the potential Target Market for a credit union and provide the credit unions that qualify with sufficient data to complete the credit union application. We’ll also
send you the application form-the special credit union application. The credit union does not have to do a Target Market map, and it will only have to complete a limited number of applications and narrative compared
with the traditional approach. If we go to the next slide, we’ll actually see the process outlined. That is NCUA, after we do a preliminary analysis, will notify the credit union of its eligibility. Remember the three factors that
we talked about earlier-being federally insured, low income designated, and having an investment area TargetTarget Market. Once we notify a credit union, our analysis will be preliminary. In order to finalize our analysis and really determine qualification
for the special credit union application, we’ll need the credit union to submit its AIRES loan file for the prior year. In this case we would need the AIRES file for the loans originated during 2015-again, loans
originated during 2015. We will analyze those through a tool that we have that allows us to actually sort them by geo code to determine that they actually are in the areas eligible under the CDFI program. If qualified,
NCUA will provide the credit union with the application form that is the special credit union version and the results of our data-a summary of our data-to include in the application. The credit union will include our data in the application,
attach the letter from us determining the pre-qualification, and complete the additional narrative in the CDFI Fund application, and submit the application to the CDFI Fund for a decision on its
certification status. Those are the six steps. Going to our next slide-with that, what I’d like for you to do is imagine yourself already a certified CDFI. What would your credit union use
CDFI funding for?” To offer new products and services, for a branch expansion or a new branch, or for technical assistance like Dave mentioned earlier-staff training, consulting services, equipment. If you’re not a credit union, please answer not
applicable. We’ll give you a couple of seconds to see how that wish list turns out. Vanessa Lowe: While we’re getting those responses, Pam, I’d like to just sort of probe a little bit into this, because I think what I heard you say is that credit unions don’t have to really know the answer themselves about whether they’re going to use Investment AreasAreas,
because maybe they don’t have the data, but NCUA is actually going to look at our own data and let them know if they fit that criteria. Is that true? Pamela Williams: Actually, we won’t know that in advance. We have a preliminary method of identifying credit unions that we think would be a good fit for CDFI certification. The way that we’ll be able
to confirm that, Vanessa, is by having the credit union submit their loan file to us. Once they submit the loan file to us, that’s the analysis that we’ll do to actually confirm where those transactions actually occurred. Are they primarily in eligible Investment AreasAreas according to the CDFI Fund program-and that’s what will be the
final determination. Vanessa Lowe: Okay, so in any case it sounds like the first step is really NCUA is going to get in touch with them if it looks like they fit? Pamela Williams: Absolutely. Vanessa Lowe: Okay. Pamela Williams: NCUA-we’ve got, as we saw them at the beginning-we’ve got 265 credit unions to get certified this year.
We’re going to be doing quite an aggressive marketing campaign. I was going to get to that in the next steps, but look for us to be very actively and proactively seeking and encouraging credit unions to consider this certification initiative. All right, so how did our results
go? It looks like 40-what is that, 48? Forty-eight point eight, so 49% offer new products first. Awesome. That really gets to credit unions being able to serve their members. With the 80va+% membership that are low income designated,
that’s an awful lot or a tremendous opportunity to enhance credit union’s service to their low income members. Now, Diane, are you ready to talk with the credit unions who have actually received their certification and awards to get their insights about
the program? Diane Rector: Yes, Pam. I sure am. Okay, so we have four credit unions that will be talking to you today, and what I have done, I have posed questions to them earlier, and they’re going to be talking to you roughly about three minutes. You can feel free to ask questions
of them. Our speakers are Cheryl Fatnassi. She is the CEO with Opportunities Credit Union, a $34 million credit union. They received an award in 2015 of $1.6 million. The next person we have is Deborah McKeety. She’s the CEO with CommunityWorks Credit Union. She is a credit union of
$2.4 million in assets, and they’ve only been a credit union for around two years. They’ve received the technical assistance grant in 2015 for $125,000. We also have Josh Beck on the phone. He is a CFO with Lower Valley Credit Union, $100
million in assets. They received a grant in 2014 for $1.6 million in assets. We have Cynthia Arone. She is a Secretary of the Board of Directors with 1st Bergen Federal Credit Union, $2.5 million. They received
a grant for $300,000 in grants. These are the questions that I have posed to them. Why did you become a CDFI? What challenges, if any, that you have faced with convincing the credit union board that you wanted to get this credit union certified? How did you
decide the needs for CDFI funding? What have you used the CDFI funding for? What has been the result? Any lessons learned for the other credit unions seeking CDFI? I’m going to turn this over to Cheryl. Cheryl, if you could just briefly describe a little bit about yourself? Cheryl Fatnassi: Thank
you very much, Diane. Opportunities Credit Union is a community development credit union located in Vermont. We received our first CDFI award in 1997 and have received a number of awards since that time. Why we became a CDFI is it’s a very recognized powerful designation, and it gives us a lot of credibility
about who we are and what we do, particularly with investors and people in the market who are looking to put additional resources into our organization. It also gives us access to capital and to training, which helps us further the mission and the work that we do. For organizations that are considering this,
your board-you may run into challenges in getting them to understand why would you want to become a CDFI. What I would say is, first of all, try to tie the CDFI funding and programs to your overall mission and strategies, understand how this money will help move those strategies and those key initiatives in your community ahead.
It’s important to communicate to the board that this is an opportunity, but it also carries a lot of responsibility to report financial and other data, to make sure that you stay in good standing with your awards and you can receive future awards. Talk to the board about how you’re going to meet those reporting requirements. Then finally,
the demonstration of your performance and the impact in your community can result in leveraging additional investments of grants, of secondary capital, of non-member deposits, that can also further the mission of your work and have a great impact on your community. How have we used the money? We’ve used the money for a lot of
different things. In particular, I’ll cite things like many of our lending programs. Going back to 2008-I’ll just take us back eight years ago-we were about $16.3 million in loans outstanding, and we had built a service portfolio of about $34 million. Well, we’ve doubled that service portfolio and we’ve
doubled our lending portfolio, and we’ve put out $183 million worth of loans in that time period. The CDFI Fund allowed us to build a secondary market where we sell to Fannie Mae. We sell to the state housing finance agency, but we also have five private investors that we sell to. We’ve provided resources that
we could use for additional underwriting staff. It provided resources to put in place the systems to allow us to originate mortgages and do that successfully. Another example is we piloted a number of models to reward people for savings. Many of you are probably familiar with traditional
IDAs. Well, we now have 15 different types of IDAs that have provided 3412 people with matches over that same time period. These are rewards for various kinds of savings. We use them with a farm program. We use them with an immigrant program, and expand on the traditional IDA programs. I won’t
get into all of the different things, but those are some examples of things that we’ve done. Lessons that we learned from the CDFI-I think it’s largely to have in place in advance good reporting systems and good controls on how you use the money, have a very clear understanding of how you intend to use the funds, and make sure that if you’re going
to attract to grants or other funding sources that you have the data to demonstrate your results in the market. I’m going to leave it at that. I think that’s my three minutes. Diane Rector: Thanks, Cheryl, very much. Deborah, can you talk a little bit about yourself and answer some of the questions? Deborah tMcKettyMcKeety: Sure. Good
afternoon, everyone. My name is Deborah McKetty and I’m with CommunityWorks Federal Credit Union. We are probably the newest kid on the block. We’ve only had our charter since March 2014, so we’re a little over two years old. Our journey to becoming a CDFI certified credit union
was probably a lot different from others in that our sponsor was actually a CDFI loan fund. Going into chartering the credit union, we understood the benefits of being CDFI certified, and it was always the goal for the credit union to become CDFI certified
as quickly as possible. However, we did have some challenges in working with a new board that didn’t fully understand the benefit. It was very important for us to align the CDFI certification with the strategic plan for the credit union. That is something
I really highly recommend. I think it’s very important. You need to be clear about how are you going to use CDFI certification and even any eventual signs that you might get to really support the work of the credit union. We were chartered through what’s called an
express charter, an extremely limiting charter, which meant we could only offer savings, products, CDs, loans up to $5,000 at the time. We have since been able to get that up to $15,000. Our product and service offerings have been very limited. We’re hoping
this year that some of that will go away. We also offer IDA and IDA matched savings program which has been very popular with a lot of residents that we serve in our community. We immediately became certified I
think in about six or seven months. We applied for our certification and within 90 to 120 days, we were approved, so that process went very smoothly. We also applied for low income designation by submitting our information to
NCUA who approved application and we are now a low income designated credit union. Then we immediately applied for a technical assistance grant, which was really beneficial for us being in the startup stages of our credit union. We were awarded
$125,000, and we’ve been able to use that to help support compensation for some of the branch staff, training and education, travel and training costs. We really feel like it is important for our staff to participate in events like the federation and other training opportunities
and, of course, the equipment. We’ve been able to use those dollars for that, so it’s been fairly flexible and extremely beneficial in the startup of our credit union. Some of the things that we’ve learned-we think the CDFI Fund is becoming increasingly more competitive. We’ve seen that certainly on the loan fund side. As
I mentioned before, we think the strategic alignment is extremely critical. I’ve had several credit unions come to us who have heard about the certification and think it’s a great idea, but they really haven’t thought through the strategy of how they’re going to use it. I think that is really important. Then as Cheryl
mentioned before, I think just making sure that you have the capacity to respond to the reporting requirements that are required, especially with the ongoing annual re-certification. Diane Rector: Hi. Thanks, Deborah, so much for speaking. Next we’re going to go to Josh
Beck, if you want to talk, Josh, and talk a little bit about yourself and answer the questions. Josh Beck: Thank you. My name is Josh Beck and I’m with Lower Valley Credit Union. I’ve been with the credit union about five years now. We’re
located in Central Washington State on the West coast. For us, the main reason of becoming a CDFI was primarily for increasing the amount in our community confidence and trust. Obtaining the CDFI certification really puts a stamp of legitimacy and
recognition upon the credit union that otherwise can’t be obtained from another government agency. First, we obtained our low income designation and then naturally, as a progression, CDFI certification seemed like a good fit. It expanded our
accessibility to grant seeking opportunities which provided an avenue for growth and an increase in capacity of serving our membership. It really supported a lot of growth within established programs that otherwise wouldn’t have been
able to become as robust as they are today. The last reason was not only does it give your membership and your community a sense of confidence in what you’re doing and how you’re doing it, but it also provides a basis for regulators when they come into your credit union to
understand who you are and what you do, because not all credit unions are CDFI certified, obviously. We’re trying to expand that. A lot of credit unions that aren’t certified are doing the work of CDFI credit unions, but it really provides a symbolism for when regulators come into
your shop and are analyzing what you’re doing and how you’re doing it. We didn’t have any challenges with our board. They really just needed to be educated in understanding what the CDFI certification would provide the credit union. Once they understood that,
they were definitely onboard. The needs for CDFI funding for LVCU were apparent across many different programs that we provide to our membership. It wasn’t necessarily deciding or figuring out one specific program. It was figuring out where the funds could
be most impactful. For us that was in providing provision for loan losses for our loan portfolio. We grew our portfolio by about $25 million over two years. That growth was very much supported by the CDFI funding we were provided.
Another reason was also for capital stabilization, if you’re going to grow your credit union by a large percentage-over 25%- it’s hard to grow income by that same amount. How else dodo you supplement income without a grant? Otherwise, we wouldn’t
have been able to grow at the pace that we did. The results, as stated, are we grew by about 50% over two years, which would otherwise have been impossible without this funding. Some lessons to be learned-I would just say
that the opportunities that CDFI certification and the grant funding avenues that are available from that are so large that if you need to go find assistance with a specialist in either the certification process or in the grant writing
process, I would definitely encourage you to do that just because it’s an opportunity, once available, that shouldn’t be passed up upon. Thank you. Diane Rector: Thanks, Josh. Finally, Cynthia-she’s the Secretary of the Board. Can you provide us some additional information about
yourself, Cynthia, and then talk a little bit about the responses? Cynthia Arone: Sure. My name is Cynthia Arone, and I’m the Secretary of the Board at 1st Bergen Federal Credit Union. I’ve been involved with the credit union a relatively short time-I guess about three years at this
point. We’re also relatively new. We started in 2009 with $145,000 in the community. We’re just under 2,000 members at this point, so we’re fairly small. 1st Bergen is somewhat unique perhaps in that our sponsor organization is a community action agency. That’s Greater Bergen Community Action.
Since Greater Bergen is our county’s designated anti-poverty agency, it was sort of a natural progression, a natural next step, to sponsor a community based credit union. 1st Bergen is a low income designated credit union and is dedicated to providing affordable banking services to the un- and
under-banked low income population in our community. Obviously, this dovetails nicely with the CDFI’s criteria. Your mission goes along with our mission. Becoming designated as a CDFI opened the doors for us to apply for a CDFI award and, as you stated, we did receive one. This enables us to progress in our
goals towards independence from our sponsor organization. It’s also providing the resources for product development and services for our target market. In terms of board cooperation, we were very fortunate in the fact that our board members were and continue to be individuals with a strong focus on community development and
service. Many of them have backgrounds in social services. Others are teachers, ministers in our community. Even those with a more business oriented background have been dedicated to serving the low income community. We’ve had a great deal of support from the board and the community for applying for CDFI certification. When
we applied for the CDFI certification, we evaluated ourselves to determine what our needs were and where they were the greatest. Although we’re a young credit union and relatively small, we felt that being able to provide much the same services as the larger institution was crucial to growing and serving our membership. The money was used
to allow us to provide modern banking products and services to our low income and credit impaired members who are our main focus. We also wanted to be able to increase lending to low and moderate income people in our target market, many of whom are turned away by traditional banking institutions or taken advantage of by payday
lenders. We’ve used the CDFI funding for a number of different things. In addition to using the funds to implement new services and offer loans to members, with the CDFI funds we’re able to maintain our net worth ratio and to have a reserve for loan loss, as other people have mentioned. In general, the funds are being used for loan
loss allowance, capital infusion, and general operations to credit unions. The result is that in a time when many credit unions have been shrinking, 1st Bergen continues to grow. Our membership has been steadily increasing as we’ve been able to offer the products and services which are necessary to attract and keep members. We’re continuing to grow and expand in our
position economically maintaining a healthy net worth ratio, while making inroads into the economically challenged on an under banked target market. We estimate that our credit union saves our members approximately $150,000 in fees and interest annually. We talked about what lessons we’ve learned, and like others have said, what we came up with was that it takes
an organization that understands the reporting and the compliance to be able to successfully do this. We’re fortunate that we had those through our sponsor organization. Thank you. Diane Rector: Thanks, Cynthia, very much. We really appreciate it. We’re going
to forward it over to the next. Pamela Williams: Okay. All right. In terms of next steps, what can you expect? If your credit union did not answer yes to the three eligibility criteria we talked about
earlier, then you can use the standard application. The standard application is available from the CDFI Fund’s website now. Go ahead and submit your application. For credit unions that think that they might be eligible and meet the
criteria for the special credit union version of the application, the first step is that NCUA will notify you of your eligibility. We expect that to happen sometime this summer. Right now we are pilot testing the process. We’ve got 12 credit unions that
opted to be a part of the pilot, and so they are going through the three stages. Remember the first stage is that NCUA notifies them and analyzes their loan data. The second stage would be the credit union then submits its application to the CDFI Fund.
Then the third stage would be the Fund acts upon them. We are in the process of doing the pilot, and we would like to have the pilot near complete and have a chance to adjust our processes as necessary before we actually start the live
implementation. Again, we think that will occur sometime within the next month or two. Next also this summer the credit unions will provide us with the loan data. We’re going to ask for-once we notify you of your eligibility, we’d
like for you to return the ARIES loan file back to us very quickly, so that we can actually begin to do the analysis. Then we will provide the qualified credit unions with a copy of the application form to complete, as well
as the data necessary to complete that special credit union application. Again, I see a number of the questions coming in about what triggers the process. NCUA actually triggers and initiates the process. NCUA also will be providing
the application form only to qualified credit unions. The application form for the special credit union version is not available and will not be available online. The credit union will then submit the application. Again, we hope that those applications start
coming into the CDFI Fund this summer. We’ve got a lot of work to do to get 265 credit unions certified. We’ll be working very aggressively to promote the benefits of the certification, as well as to answer any questions that you have about the process,
whether you’re using the standard application or the special credit union version. For that, we plan to host a number of question and answer or Q&A calls with CDFI Fund staff that will help you as you go through the application process and will provide you with
the forum to answer technical questions as you’re completing your applications. Look for notices and schedule availability in an upcoming issue of FOCUS, the monthly e-newsletter that OSCUl provides to the credit unions that we serve. Additionally, we expect
to have additional eligibility notices and rounds throughout the year. Again, if a credit union does not receive one of the notices this summer, don’t panic. There are additional opportunities. It’s going to take us a while to work through the pipeline that we expect
of credit unions. Those are what you can expect in terms of next steps. The online resources-and I mentioned this earlier and I want to just emphasize it again-on the green Resource list widget that’s on your console-it looks like a folder-if
you click there, you will see hyperlinks to each of these resources. Again, the CDFI Fund certification video-I think this is an excellent starting point for any credit union that’s interesting in learning more about CDFI certification and getting
an overview. Again, what we covered today was just kind of a glimpse. For an introduction and overview to CDFI certification, then all credit unions, whether you’re going to be using the special credit union application or the standard, should look at the introduction and overview module.
Those credit unions that will be using the standard application, meaning that you are either a credit union that does not have a low income designation status or that you already know that your credit union may need some of the other Target MarketsMarkets that Michelle
mentioned-the population-based Target MarketsMarkets. Then the entire video series would be pertinent for you to review, because that video actually goes through the entire application from the perspective of a credit union. We think that’s very
exhaustive, and we would recommend that you use that. The next resource that we have available is the Low Income Designation (LID)- CDFI Fact Sheet. It provides an overview of the benefits of each designation and then has more resources from each, and it’s available
on our website. Then third, as a resource, we are going to be building the frequently asked questions or the FAQ+s section of the OSCUl database on our website. As questions come in through either the Q&A or through the CDFI Fund and through
us, we will be putting the answers there in our searchable database for you to be able to refer to them on demand. Vanessa Lowe: Thanks so much, Pam. Okay. We are running a little bit out of time, but we’re going to leave at least ten minutes for some Q&A. Here is a list of our upcoming
webinars. You’ll also find them on the NCUA website under events, so you can get those dates there and put them in your calendar. All right. The next thing that’s going to show is the agency contacts, and so you have us available. Remember that you can download the full set of slides also from that Resource widget. If you need to see those again, you can get those from there.
This thing that’s showing on the screen now is a little survey to give us feedback on this webinar. I’m going to leave that there while we move into the Q&A, so you can click that and give us feedback. Diane, let’s go ahead and jump into a couple of these questions, so let’s do the first one. Diane Rector: Okay. Cheryl, the first one is for you. Did you
ever say that you must re-certify annually. Is this true or false? Cheryl Fatnassi: That is absolutely true. We have moved to a mandatory annual certification report. We have a new awards management system called AMOS on our website that organizations
will need to create a profile and sign up and all of that kind of stuff and submit their reports through there. We have guidance and everything that has just gone out with regard to submitting your
annual report. Yes. It’s an annual reporting process, as opposed to a three-year re-certification process. Diane Rector: Hi. The next question is for David. David, can CDFI Funds be used for ADI account matching use for first time home buyers
or auto loan purchases? David Scherler: That’s a good question. Unfortunately, CDFI funds cannot be used for any sort of IDA matching. Unfortunately, those are just the rules, and you can’t apply any funding from CDFI awards for IDA match. Diane Rector: Thank you. Vanessa
Lowe: I just want to ask a follow-up question about that. David, can CDFI Funds be used to provide the loan funds for things like home purchase? David Scherler: Yeah, for sure. They can be absolutely used for the actual loan. They just can’t be used for the match. Vanessa Lowe: Understood, and for
those who don’t know what IDA is. It’s an individual development account, which is a matched savings account. Go ahead, Diane. Diane Rector: Thanks, Vanessa. This question is for Cynthia. Cynthia, for a $2.5 million credit union you were able to obtain a grant. How did you use the
funding and what would you have done differently? Cynthia Arone: I’m sorry. I had it on mute. How did we use the funding? As I said, we have been using it in a number of ways. We’ve been using it for different things. We’ve been using it to implement new services, to offer loans to
members. We’ve been using it as a reserve for loan loss and to maintain our net worth ratio. What would we do differently? I don’t know. I think we did a great job. We were very, very pleased to have been able to be awarded this CDFI grant. We were very grateful for that. I’m not really sure what we would have done differently
with that. I’m not sure if that really answers it, but I’ll have to think about it, and if there’s more I’ll let you know. Thanks. Diane Rector: Thank you very much. David, the question goes for you. What are native CDFIs? David Scherler: Sure. Native CDFIs are CDFIs that
focus 50% or more of their lending and financial activities to a term we use here-native community. That just stands for American Indian, native Alaskan, and native Hawaiian communities. A native CDFI-they focus primarily
in native communities, but largely they’re the same. They have the same certification criteria. The only thing that really makes them different is that in the Target Market test 50% or more have to be going to a native Target Market. Diane Rector:
Thanks so much, David. This question goes to Michelle. Michelle, do you have to be a designated low income credit union to be CDFI certified? Michelle Dickens: You do not. We have more than one way, as you see, for becoming certified. We can certainly talk through that.
We have a lot of materials that will answer that question in more detail for you, but you do not need to be an LIC credit union in order to be certified. Diane Rector: Thank you so much. Pam, the next question is for you. How will eligible credit unions be notified if they’re going to
be in this program? Pamela Williams: Right. As I said, we are going to run a preliminary analysis based on the agreement that we have with CDFI Fund for the data that NCUA collects on credit unions that closely approximates the CDFI Fund certification. Once we’ve done that, we will have a
list of credit unions that we think have a very reasonable chance of becoming CDFI certified. We will be notifying those credit unions of their eligibility in order for them to submit to us their loan files for us to conduct a complete analysis to determine
their qualification for the special credit union application. Diane Rector: Thank you. Pam, the next question is for you. How did NCUA determine which eligible credit unions to contact first? Pamela Williams: Right. We are, again, using the data that
we already get. We met with CDFI Fund to go over to each of the-there are six requirements that we actually went through. We found points of synergy that the Fund agreed that-let’s say, for example, with a credit union that has a low income designation, that
was determined to be a proxy for the CDFI Fund’s primary mission requirement. We went through each of the requirements to find a comparative or proxy data point that NCUA collects. Those credit unions that have the highest number
of points in comparison, along with those that offer a products and service mix that is in most service to individuals and members of low income-those would rank highest on the list. We’re going through that kind of
prioritization. Again, our list is just an eligibility. What we can’t do is determine where a credit union’s loan transactions are to actually be able to geocode them. That means to map them geographically according to the Fund’s eligible areas, and that’s why
we need the loan files that the credit unions are going to be sending to us. Diane Rector: Thank you so much, Pam. A quick question for you, for Josh. Josh, one of the credit unions wants to know would you suggest hiring and obtain a specialist in grant writing?
Josh Beck: Thank you. I would suggest-it’s a very unique skill set for grant writing. You first have to obtain all of the data to support what you’re writing the grant for, whether that’s a program, a new branch, outreach-whatever that is. You have to have both the
empirical data to support that it’s going to be effective and then writing about it is also a completely different skill set. Finding that within your staff is a difficult task to do. If you do have those type of specialists, then maybe you could do that in
staff. However, for us, at least, the time that’s required to write an effective grant and gather all of the data and bring all of these different interworking parts together just wasn’t cost effective, I don’t believe, for the credit union.
Also, sometimes if you bring in someone that specializes in this area, other ideas generate from other than what just your credit union was thinking about internally when you started this process. It could be either way, but generally if you’re
under a certain threshold then you don’t have that expertise on staff, it could be beneficial to bring that from an outside source. Diane Rector: Thank you very much. Pam, a quick question for you. What if you’re a low income credit union that’s privately insured? Pamela Williams: Right.
For the eligibility for the special credit union application, you must be federally insured. If your credit union is privately insured, then you will need to use the standard application. Again, those applications are available on the CDFI Fund’s website and your credit union is welcome to start that application process at any time. Vanessa Lowe: Okay. This
is Vanessa. I’m going to jump in because I’m seeing a couple of questions from groups that may be in the process of chartering a new credit union. We also had a guest speaker who’s credit union was only two years old. David or Michelle, can you tell us how old or how much experience does a credit union need to have in order to apply for certification?
David Scherler: Michelle, I think you might be the better person to answer that question. Michelle Dickens: Yeah. I was actually talking when the phone was on mute. I apologize for that. The CDFI Fund likes to say that we don’t certify startups.
We explain that by saying that the organization has to be in regular operation. Our proxy is utilizing a full year’s worth of activity and sending us information on the activity-loans closed, if you
will-and the number of memberships for credit unions to demonstrate that they are in regular operation. Vanessa Lowe: Okay. Great. I’m sorry. Did I cut you off? Michelle Dickens: I was just going to say that there is another segue
to that question with regard to how much activity needs to be maintained. In terms of the Target MarketMarket, an organization must serve at least one eligible Target Market. In addition to that, they must direct at least 60% of its financial product activities to at
least one or more of those Target Markets. For regulated institutions, the organization must direct at least 60% of its deposits or shares and 60% of its membership, for the example, of credit unions to one or more of those Target Markets. Vanessa Lowe: Okay. Great. Great information.
I’ve got another question here that falls under David, it looks like. Is there assistance with writing the grant applications for the grant funding? I noticed somebody also asked the question, do we hire a consultant? How much assistance does the CDFI Fund offer in that process?
David Scherler: That’s a good question. We don’t offer any assistance in writing your applications, especially on an individual basis. You can’t come to any staff member and say, “Hey, can you help me write my response if I tell you what we’re doing?” We won’t do
that. We do, though, do lots of trainings and webinars and in-person trainings when the funding round period is open. It’s usually a 60-day period. This year we did an in-person training in Minneapolis. I was there. We did one, of course, here in DC, and we did one in Atlanta. That’s
a half a day of vent and we’ll walk through the questions, the narrative questions that you’ll respond to. We’ll also walk through some of the financial data that we’re looking for. We’ll give you some greater context into these are the things that we are looking for. These are the types of responses that traditionally
tend to score well. These are the types of responses that traditionally tend to score less. You can pick our brains. You can ask lots of questions. It’s very interactive. We do, do like general training on the application, but we don’t provide one-on-one technical assistance on preparing applications themselves.
Diane Rector: Okay. Thank you very much. We have one last question. After this video, you can view it within like three weeks. It’s going to be available for you to view. The final question goes to Pam. Just to be clear, NCUA is contacting credit unions who qualified before they even
applied. That’s number one. Will the NCUA automatically perform the analysis for CDFI certification for low-income credit unions in short, or do they need to request a review from the state? Pamela Williams: Great. To answer the first part of the question, yes, NCUA
will be contacting the credit unions. NCUA actually initiates the process under this special credit union application process. The second question-also a great question-if your credit union has a low income designation, the equivalent of NCUA’s by it’s
state supervisory authority, that’s also permissible. Because we would have it as a low income under our approval process, then yes, you would still make our list for consideration for the special credit union application. Diane Rector: Okay, so for all of the questions that were not answered, we will
be getting back to you. We will be sending you an email message responding to your specific questions within the next three weeks. Vanessa Lowe: Thanks so much, everybody, for joining us. This has been a fantastic webinar, and we got a lot more questions than we could cover. As Diane said, we will
build a dataset of the full set of responses to those questions and make them available. Thank you again for joining us.

One comment on “NCUA Webinar: CDFI Certificatio​n – More Than One Way to Get There (6/13/2016)​”

  1. Hajime Narita says:

    Bona fide Thanks

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