Cuna Mutual Group Foundation has committed to invest US$1m in a fund to build equity in credit unions led by or serving people of colour.
The money is going to the Racial Equity and Resilience Investment Fund, which is operated by Inclusiv, the umbrella group for credit unions working as community development financial institutions (CDFI), which has been working to boost financial inclusion in underserved communities.
The Foundation says its investment will facilitate secondary capital investments in minority designated and community development credit unions over the next decade – adding that this marks “an important next chapter” in its work with Inclusiv.
“Over the past two decades, CUNA Mutual Group (CMG) has consistently supported the mission of Inclusiv promoting financial inclusion in underserved communities through credit unions,” says Cedric Ellis, executive vice president and chief enterprise services officer of CMG and chair of the Foundation board.
“With this investment, we will be aligning the investment strategy of the Foundation with the DEI goals of the company and build on the legacy of credit unions led by leaders of colour.”
The relationship between Inclusiv and CMG relationship deepened during the pandemic as the company forged a strategic partnership with Inclusiv providing targeted training, technical assistance, data analytics support to help credit unions orient their work and services toward low-income and communities of colour.
In the past two years, adds CMG, this collaboration has driven the number of certified CDFI credit unions to an all-time high of 476 institutions with a primary mission and predominant business activity targeting low-income and distressed areas. It says this has unleashed millions of dollars of credit union lending to people and communities previously excluded from the financial mainstream.
The Racial Equity Investment Fund, launched in 2020, deploys secondary capital to expand economic relief and to remove barriers to services for credit unions that are led by and/or serve communities of colour.
“Secondary capital builds institutional net worth,” says CMG, “enabling credit unions to leverage deposits and to increase lending to minority-owned businesses, homeowners, and consumers. Credit unions can expand their impact in providing access to capital and new financial opportunities to people who are traditionally underserved and underbanked.”
Cathie Mahon, president and CEO of Inclusiv, said: “This investment from CMG Foundation is groundbreaking. Together we are growing the necessary capital to help credit unions address systemic inequity in financial service to low-income and communities of colour.
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“We believe this commitment from CMG Foundation will pave the way for more industry secondary capital investments enabling minority designated and CDFI credit unions to grow members, lend more deeply in their communities and grow the net worth for their institutions and the members and communities they serve.”