Community Development Credit Unions

Community Development Credit Unions (CDCUs) may be the best vehicle for providing affordable capital and financial services in low- and very low-income areas. So why can't there be more of them? This article seeks to answer that question.

1 minute read

September 17, 2001, 12:00 PM PDT

By Abhijeet Chavan @http://twitter.com/legalaidtech


Community Development Credit Unions (CDCUs) may be the best vehicle for providing affordable capital and financial services in low-income and very low-income areas. So why can't there be more of them? This is the question the author explores in this article on the opportunities and challenges associated with expanding the CDCU industry. The CDCU structure enables them to tailor services, loans and financial education to their members in ways that traditional banks often cannot. But under-qualified management, inadequate capital and liquidity, and the ability to provide only a limited range of services continue to constrain CDCU growth. However, with a concerted effort by credit unions, banks, regulators, trade organizations, and government agencies to dedicate more resources and employ new strategies, these weaknesses can be overcome, and the benefits of the CDCU model can be fully realized.

Thanks to Kurt Sommer

Monday, September 17, 2001 in The Brookings Institution

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