Federation CDFI Annual Certification Reports for Members. ⢠Announced December 2017. ⢠Free technical assistance for
Telling Your Story, Telling Our Story Using Data to Convey Credit Union Outreach & Impact
Today
CDFI Credit Union Update
Telling Your Story Telling Our Story
Today
Lots of good news! ^ CDFI Credit Union Update Telling Your Story Telling Our Story
CDFI Certified Credit Unions 1996-2016
286
• 305 CDFI Credit Unions • $100 Billion in combined assets • 9.5 million total members
200
40
66
123
123
$
Total Assets ($ Billions)
Total Membership (Millions)
As of January 2018
CDFIs by Type Financial Institution Types Regulated CDFIs Credit Unions Banks and Thrifts Depository Holding Company Unregulated CDFIs Loan Fund Venture Capital Fund Total Number of CDFIs
%
% Growth Since 2013
49% 28% 13% 8% 51% 50% 1% 100%
79% 76% 86% 80% 14% 13% 23% 38%
2017 #
536 305 141 90 574 558 16 1,110
• Credit Unions still just 28% of certified institutions, yet – ➢ account for more than 75% of the combined assets of all CDFIs ➢ serve more consumers than the rest of the CDFI industry combined
CDFIs by Type Financial Institution Types Regulated CDFIs Credit Unions Banks and Thrifts Depository Holding Company Unregulated CDFIs Loan Fund Venture Capital Fund Total Number of CDFIs
%
% Growth Since 2013
49% 28% 13% 8% 51% 50% 1% 100%
79% 76% 86% 80% 14% 13% 23% 38%
2017 #
536 305 141 90 574 558 16 1,110
• CDFIs are now a significant voice in credit union industry ➢ Almost one in ten credit union members belong to a CDFI ➢ 7% of total credit union assets are in CDFIs
CDFI Update Federation CDFI Annual Certification Reports for Members • Announced December 2017 • Free technical assistance for 2018 ACR preparation and submission
• Nearly half of all CDFI certified credit unions enrolled • Two Key Benefits 1. Reduce compliance burden for CDFI credit unions 2. Provides unprecedented aggregate data on CDFI credit union activities and impact
CDFI Update Results of CDFI 2017 Funding Round • Record number of credit union applicants • Record number of credit union awards (55)
• Record success rate for credit union applicants • 60% of all applicants received awards
CDFI Update CDFI 2018 Funding Competition • Released January, Due April 4th ➢ SF-424 Due March 2nd through Grants.gov
• Welcome Changes in New Application ➢ ➢ ➢ ➢ ➢
Improved guidance Reduced data entry More consistency with NCUA accounts & definitions Increased flexibility in choosing objectives Higher probability of success for high-performing CDFIs
CDFI Update CDFI 2018 Funding Competition • Strong credit unions can compete well in all aspects of application, but many struggle with one key question: Identify how your financial products and services create ➢ short-term and long-term positive outcomes
➢ economic opportunities in the communities you serve.
Today
CDFI Credit Union Update
Telling Your Story Telling Our Story
Today
CDFI Credit Union Update
Telling Your Story Telling Our Story
Three Pillars of CDFI Success & Impact
Financial Performance
Financial Capability
Financial Inclusion
Impact
CDFI Obligation to grow
Lending
Lending
Lending
Deeply
Effectively
Profitably
A Business Model for CDFI Credit Unions Lend deeply
CDFI credit unions deploy a high percentage of loan capital in the lowest credit tiers
A Business Model for CDFI Credit Unions Lend deeply
Lend effectively
CDFI credit unions see greater net gains in member credit scores
A Business Model for CDFI Credit Unions Lend deeply
Lend profitably Median Return on Average Assets FY 2016
Peer Group (Asset Size) Less than $2 million $2 million to $10 million $10 million to $50 million $50 million to $100 million $100 million to $500 million More than $500 million
Lend effectively
CDFIs
Non CDFIs
0.02% 0.34% 0.41% 0.53% 0.68% 0.71%
0.09% 0.14% 0.27% 0.37% 0.49% 0.75%
CDFI credit unions outperform peers in growth of members, loans & assets and ROA
A Business Model for CDFI Credit Unions Lend deeply
Lend profitably Median Return on Average Assets FY 2016
Peer Group (Asset Size) Less than $2 million $2 million to $10 million $10 million to $50 million $50 million to $100 million $100 million to $500 million More than $500 million
CDFIs
Non CDFIs
0.02% 0.34% 0.41% 0.53% 0.68% 0.71%
0.09% 0.14% 0.27% 0.37% 0.49% 0.75%
Lend effectively CDFIs are the most dynamic segment of credit union industry, leading in mission, margin and growth
Today
CDFI Credit Union Update
Telling Your Story Telling Our Story
Today
CDFI Credit Union Update
Telling Your Story Telling Our Story
This time last year, we worried about a number…
First we worried…
…and then we acted… •
CDFI credit unions hiked the Hill and told their stories
…and then we acted… •
CDFI credit unions hiked the Hill and told their stories
•
Credit unions told their stories to representatives in their districts
…and then we acted… •
CDFI credit unions hiked the Hill and told their stories
•
Credit unions told their stories to representatives in their districts
•
The Federation and mainstream credit union and bank trade associations added our voices in support of appropriations for CDFI Program
…and we got results.
Telling Our Story •
As part of the 2017 advocacy campaign, the Federation combined stories with data to strengthen advocacy efforts at state and national levels
Telling Our Story •
As part of the 2017 advocacy campaign, the Federation combined stories with data to strengthen advocacy efforts at state and national levels
•
Data helps convey the scale of activities and impact
Telling Our Story •
As part of the 2017 advocacy campaign, the Federation combined stories with data to strengthen advocacy efforts at state and national levels
•
Data helps convey the scale of activities and impact
•
While useful, the data does not provide a ground-level view of activities & impact
Credit Union impact data has been chronically underreported among CDFIs
As a result, total activities & impact of all CDFIs have been dramatically underreported
Why? Two Sources of CDFI Fund Data on Credit Union Activities & Impact 1.
Annual Certification Reports – Basic financial information – Attestations of compliance – Survey questions – Target Market breakdowns by Portfolio
2.
Community Investment Impact System (CIIS) – Only reported by awardees – For credit unions, CIIS only captures Business and Real Estate loans
For researchers working with the CDFI CIIS data, the scale & scope of credit union consumer financing almost invisible
Why? Two Sources of CDFI Fund Data on Credit Union Activities & Impact 1.
Annual Certification Reports – Basic financial information – Attestations of compliance – Survey questions – Target Market breakdowns by Portfolio
2.
Community Investment Impact System (CIIS) – Only reported by awardees – Only captures Business and Real Estate loans at transaction level
What does this look like?
One CDFI Credit Union, One State LGFCU in North Carolina 1. CDFI Annual Certification Report – One location – Total assets, total outstanding loans by portfolio with Target Market percentages
One CDFI Credit Union, One State LGFCU in North Carolina 1. CDFI Annual Certification Report – No Target Market data on new lending activities – No loan data by geography
One CDFI Credit Union, One State LGFCU in North Carolina 2. CDFI Community Investment Impact System (CIIS) – Transaction data improves view of statewide coverage, but… – Business and Real Estate Loans only 6% of LGFCU’s loan count
Federation Data Collection • Federation’s 2018 free Annual Certification Report service for members • Almost half of all certified CDFI credit unions have signed up for service • Aggregate data from ACR analysis will provide unprecedented view of – scale and geographic concentration of CDFI credit union lending
– Distribution of loans by type – Lending benchmarks by CDFI Target Market – Lending in Persistent Poverty Counties
– Lending by Congressional District
One CDFI Credit Union, One State LGFCU in North Carolina 1. CDFI Annual Certification Report
One CDFI Credit Union, One State LGFCU in North Carolina 1. CDFI Annual Certification Report 2. CDFI Community Investment Impact System
One CDFI Credit Union, One State LGFCU in North Carolina 3. Federation Annual Certification Report Data Collection – Comprehensive view of credit union activities – Average of $100 million in loans per congressional district
One CDFI Credit Union, One State LGFCU in North Carolina 3. Federation Annual Certification Report Data Collection Imagine the power of this data multiplied by •
Seven more CDFI credit unions in North Carolina
•
Nearly 300 more CDFI credit unions across the country
CDFI Credit Unions – Telling Our Story More than just advocacy… this is how we learn • Stories, case studies & better data help identify & spread successful innovations, effective practices, performance benchmarks – and new opportunities
CDFI Credit Unions – Telling Our Story
Terry Ratigan Senior Consultant National Federation of Community Development Credit Unions (212) 809-1850 ♦
[email protected] ♦ www.cdcu.coop
