“CDCU” is an acronym coined by a trade association serving credit unions called The National Federation of Community Development Credit Unions. CDCU stands for Community Development Credit Union. Credit unions that pay membership fees to join the trade association can use the term CDCU, and call their institutions community development credit unions.
While CDCU indicates membership in the trade association, this differs from formal government designations earned by credit unions serving low income people. The most common of these designations are the CDFI certification and Low Income Designation.
To become a Community Development Financial Institution (CDFI), a credit union must be certified by the US Department of the Treasury, CDFI Fund. To become Low Income Designated, a credit union must meet criteria set by the National Credit Union Administration. In each case, documentation must be submitted to the agencies to demonstrate service to the low to moderate income people. Being a community development credit union (CDCU), ad a member of the trade association does not provide access to federal funding from these agencies or other regulatory benefits.
A credit union member of the trade association using the identifier “CDCU” may serve low-and moderate-income people and communities, though not all do. Some CDCUs are credit unions that generously provide financial support to the trade association through membership dues to support the efforts of other CDCUs serving low income communities. While most credit unions calling themselves CDCU’s specialize in serving populations with limited access to safe financial services, not all have received the CDFI certification.
As with all credit unions, CDCUs are:
Fully insured regulated depository institutions
Financial cooperatives owned by the member/customers
As with all CDFIs, the sub-segment of CDCUs that have a CDFI certification specialize in providing:
Distressed consumers with access to mainstream financial products and services.
The ability to open savings accounts and cash checks even if the accounts are denied by other banks and credit unions.
Financial coaching, counseling and support to help consumers improve credit and access products they are otherwise denied.
Loans to refinance and/or consolidate predatory debt, build credit and solve emergencies.
Financial products and services to eliminate debt traps which decrease household stability.