Inspiring trends were presented at CUNA's CDFI Roundtable by Chief Economist, Mike Schenk.
CDFI certified credit unions had the direct benefit of $874 million in the communities they serve, equalling $250 per family.
The credit unions certified as CDFIs additionally created 82,391 jobs and spurred $18.1 billion in economic impact. This was determined through economic forecasting of (Jobs, Earnings, Operating Expenses + Purchase of Intermediate Goods & Services + Household Spending) following the model of (Direct Effects + Indirect Affects + Induced Effects).
Not at all surprising with this benefit, membership growth is outpaced the industry by 430%. Small credit unions in the U.S. experienced membership declines in 2018. As a result, the U.S. median annual growth rate for credit unions was 0.0% at the end of the third quarter 2018. The 2018 membership growth for CDFI certified credit unions was 4.3%, even outpacing population growth of 0.8%
The lesson here is that CDFI certified credit unions developing products, partnerships and programs unique to their communities are in high demand. They are investing in job creation and returning money to the households of hard working Americans and helping them to retain their hard earned money. This in-turn is improving the quality of neighborhoods, increasing home ownership, raising wages and reducing unemployment.
NCUA and CUNA data also shows that CDFI certified loans are up 70% in the last five years. CU Strategic Planning has monitored the profitability of CDFI credit unions over the past ten years. Our findings are conclusive and have been affirmed by NCUA data. Credit Unions that focus on community development are more profitable, lend more actively and grow faster than their mainstream peers.
With all this impact, what are the loans CDFI certified credit unions are generating? In 2018 CDFI Credit Unions originated approximately:
• 3 million loans overall
• 55,000 first mortgages
• 42,000 second mortgages/HELs
• 8,000 small business loans
• 18,000 payday alternative loans with an average loan size of $625
CU Strategic Planning has been a driver of the credit union CDFI business model for the past ten years, winning $102 million in CDFI grants for credit unions resulting in $5.5 billion in loans. Our clients have four times the ROA of their peers.
Learn how to become a CDFI Certified Credit Union by downloading our Comprehensive Guide to CDFI Certification.
Sources: CUNA, NCUA and Inclusiv 2019