WASHINGTON — Credit unions received over $5 million in technicaland financial assistance grants from the U.S. Treasury Department'sCommunity Development Financial Institutions Fund during the latestround of awards.
|The awards hike the amount given to CUs by almost $2 millionover last year, according to the National Federation of CommunityDevelopment Credit Unions, which itself received $600,000.
|The Federation said its award is intended primarily forsecondary capital investments and Predatory Relief and InterventionDeposits (PRIDEs) in member CDCUs. The predatory relief depositsare considered “risk sharing deposits”, the Federation said, thatcan be used to collateralize loans made by credit unions to fightpredatory or abusive lending.
|The Federation shares the risk on these loans by assuming therisk on 25 to 40% of the loan principal. Any losses to those loansare shared pro-rata between the credit union and the Federation.When the deposits mature, the credit union repays the Federationthe original deposit amount minus the Federation's share of lossesrealized on secured anti-predatory loans, the Federationexplained.
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