The promotion of thrift continues to be central to the mission of CDCUs. Individual Development Accounts, or IDAs, provide an ideal vehicle for encouraging low-income credit union members to save toward homeownership, self-employment and higher education. Currently, 44 CDCUs around the country participate in the Federation’s IDA program, with more than 400 open accounts.

IDAs are restricted savings accounts that provide incentives to help low-income people save and build assets. Individuals who open an IDA receive matching funds, normally ranging from $1 to $3 for each dollar they deposit into their account. In addition, IDA programs normally include support services such as budget counseling and homeownership and entrepreneurial training to help participants achieve their goals. When the individual has accomplished the savings goal they had initially set, they may withdraw all of the account to spend on that goal, including the matching funds granted by the CDCU or an outside organization. While saving a large amount of money can be difficult for low-income people with pressing immediate expenses, the personal and practical achievement of attaining a savings goal can be a pivotal experience.

Weed and Seed IDA Demonstration Pilot Project

In 2005 the Federation received a grant from the Department of Justice Community Capacity Development Office to help establish Individual Development Account (IDA) programs in ten “Weed and Seed” sites across the country.  The Federation will be responsible for providing technical assistance to help Weed and Seed sites design effective IDA programs and submit qualifying applications for AFI funding no later than June, 2006. 

Weed and Seed began in the early nineties as a strategy to prevent, control and reduce violent crime, drug abuse, and gang activity in targeted high-crime neighborhoods across the country.  The strategy is to increase enforcement while “seeding” the sites with human services that lead to neighborhood revitalization.  Today there are more than 320 sites across the country, ranging in size from several city blocks to 15 square miles.

In recent years, Weed and Seed sites have increased their emphasis on asset-building initiatives to increase the economic stability of their communities.  Most sites now incorporate VITA/EITC, financial education, or homebuyer assistance into their strategy, and some are already implementing IDAs.  The current demonstration project is focused specifically on homeownership IDAs to test the impact of a successful IDA program on community stability and revitalization. 

For more information about the Federation's technical assistance for the Weed and Seed IDA Demonstration Program, please contact Terry Ratigan (tratigan@cdcu.coop)