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Program History
The Federation has over 25 years of experience in tailoring portfolios to the interests and needs of a variety of investors -- foundations, banks, government, religious organizations, and individual trusts (see our list of investors). Usually, investments to the Community Development Investment Program are $100,000 or more, for terms of at least three years, at below-market interest rates. Unless the investor instructs us otherwise, we usually create a diversified portfolio of investments in multiple CDCUs, and we match the maturities of our investments in credit unions with the investor's instructions.
When the Federation places deposits in credit unions on behalf of an investor, we do so only to the limits of insurance (unless otherwise instructed by the investor). The Federation always maintains sufficient net worth and liquidity to repay any loans made to Community Development Investment Program. For over 20 years, we have never defaulted on, deferred, or reduced any payment of principal or interest. All investors are invited to request a copy of our CPA-audited financial statements.
For a more detailed history of our Community Development Investment Program, please click here.
Our Investors
The Community Development Investment Program receives loans, grants, and deposit funds from a wide variety of sources for reinvestment in local credit unions. Our investors include foundations, banks, credit unions, trusts, faith-based institutions, and the federal government.
To view our full list of investors, please click here.
How We Invest Your Funds
Community Development Investments Committee
All investment applications are reviewed by the Community Development Investments Committee. To ensure objectivity, the Committee is an "arm's length" group, consisting of experts in credit union management and community development finance; no voting member of the Committee may come from the Board, staff, or membership of the Federation. The committee meets four times a year to review applications from credit unions, monitor the investment portfolio, review program policies, and assess overall performance of the program. With few exceptions, all awards must be approved by the Committee.
Our Underwriting
After the Federation receives an application from a credit union, a member of the Community Development Investment staff analyzes and assesses it. Staff reviews the applicant's history and its mission, analyzes its historical financial performance, and assesses its business plan and financial projections (if required; see Product Descriptions 6.1.3). Staff writes up its assessment, and submits it to the Committee for approval, modification, deferral, or rejection.
The Community Development Investments Committee's work is guided by the Federation's Management Policies for Community Development Investments. The Policies address maximum size of investments, interest rates, maximum maturities, and benchmark financial indicators for underwriting.
Our Performance
The chart below shows the rapid growth of the Federation’s Community Development Investments over the last 17 years.
|
DESCRIPTION
|
1990
|
1995
|
2000
|
2005
|
|
2007
|
|
Total Assets Under Management
|
$3.71
|
$5.91
|
$18.62
|
$26.62
|
|
$38.4
|
|
Number of Investors Participating
|
13
|
18
|
24
|
31
|
|
32
|
|
Investments In CDCUs
|
$2.39
|
$3.24
|
$14.91
|
$18.47
|
|
$28.79
|
|
Member Credit Unions
|
90
|
130
|
192
|
220
|
|
230
|
|
Number of participating CDCUs
|
39
|
54
|
99
|
117
|
|
121
|
*Dollar Amounts are in Millions
Investments in 2007
For the period of January 1, 2007 to December 31, 2007, the Community Development Investments Committee considered 59 separate requests for all investment products for a total of $7.1 million and it approved 51of those requests for a total of $5.4 million.
Investments by Product at December 31, 2007:
|
|
Disbursed |
Committed
|
|
Insured Deposits Disbursed
(JUMBO, Non-Member and Nominee)
|
$13.79
|
$.08
|
|
Micro-Enterprise Deposits
|
$.12
|
--
|
|
PRIDEs™
|
$1.58
|
$.30
|
|
Secondary Capital
|
$4.47
|
$1.38
|
|
IDA Grants
|
$.42 |
$.05
|
|
Equity Grants
|
$2.13 |
$.02
|
|
Technology Grants
|
$.24 |
--
|
*Dollar Amounts are in Millions
Overall Program Impact
The Community Development Investments portfolio demonstrates the Federation’s emphasis on investing in credit unions that serve low-income communities and have high potential for growth.
Growth of Federation Member Credit Unions: 5-Year Cumulative Growth 2000-2005
| |
Assets
|
Net Worth
|
Loans
|
Membership
|
|
All non-member Low-Income CUs
|
54%
|
52%
|
50%
|
16%
|
|
All Federation members
|
75%
|
71%
|
78%
|
31%
|
|
Community Development Investments CDCU Participants*
|
105%
|
96%
|
134%
|
103%
|
|
* 42 CDCUs that received CDIP assistance in 2000
Note: Data from Callahan & Associates |
