The Community Development Investment Program (CDIP): Capital for Community Development Credit Unions (CDCUs) Clifford Rosenthal National Federation of Community Development Credit Unions

What are “CDCUs?” “CDCUs” (Community Development Credit Unions) = credit unions that specialize in serving low- income people CDCUs provide: savings, loans, transactions, financial education CDCUs serve the financially excluded –Cities, rural areas, reservations with no banks –People with small savings –People who need small loans / no or poor credit history –Microenterprises and local small businesses –Cooperatives –Minorities and immigrants –Low-wage workers

The Federation’s CDCU Network The Totals –200+ CDCUs –$5.0 billion in total assets –1 million members The “Average” (Median) CDCU $2.2 million in assets 1,000 members 30 years old The Largest: $1.5 billion / 250,000 members

What We Provide Equity (secondary capital loans – like EQ2) Grants (occasionally) Deposits for liquidity Purchase of mortgages for CDCU Secondary Market Risk-sharing Deposits for special impact –Assistive technology –“Anti-Payday Loans” –PRIDEs (Predatory Relief and Intervention Deposits)

The CDIP At a Glance Started by Federation in 1982 as the Capitalization Program First 15 years: supplied only deposits 1996  expansion of product lines to include secondary capital, grants, risk-sharing deposits Currently invested in 120 CDCUs nationwide

Our Largest Investors ($1 million and above) Ford FoundationKellogg Fdn. Annie E. Casey Fdn. Calvert Fdn. CDFI Fund Bank of AmericaTD Bank HSBC Bank Deutsche Bank

Portfolio Highlights Assets under management: $51.6 million New or renewed investments received or committed, 2009: $10.2 million –Two year total: $25.6 million Invested in or committed to CDCUs: $38 million (80% deployment rate) Mortgage portfolio: $7.7 million

Focus: Secondary Capital Structure: long-term, deeply subordinated debt that counts as regulatory net worth. –Comparable but not identical to EQ2 Treasury’s new Community Development Capital Initiative (CDCI) –Direct secondary capital investment in CDFI- certified CDCUs –Matching funds from Federation’s CDIP

Focus: CDCU Mortgage Center, LLC Federation purchases mortgages originated by CDCUs –Fixed rate –Affordable –Seasoned –Target populations Mortgages will be re-sold to social investors, CRA investors, others

Cliff Rosenthal, President/CEO National Federation of Community Development Credit Unions 116 John Street, 33 rd Floor New York, New York / fax: