Appalachian Community FCU Receives Nearly $1 Million to Help Advance Mission

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Appalachian Community Federal Credit Union (ACFCU) will receive nearly $1 million from the U.S. Treasury’s “CDFI Fund” to help the credit union carry out its work with underserved consumers.

“This award signals that ACFCU has reached a new, national level of credibility as a Community Development Financial Institution,” CEO Ron Scott said.

The $916,905 fiscal 2017 award underscores the level of efficiency and impact ACFCU has reached in programs that help people access capital for homes, vehicles and other life necessities. That impact is made more sustainable by the credit union’s additional focus on financial literacy and helping its members – and others in the communities it serves – “stair-step” their way to increasing levels of financial health and stability.

“ACFCU has vigorously pursued a mission-driven focus since becoming a Community Development Financial Institution in 2013,” Scott said. “This award will help us reach even more of the consumers who lack options in the mainstream financial sector.”

Michael Cummings, who leads one of several ACFCU partner organizations, agreed.

“With the credit union at our side, we’re providing entrepreneurship opportunities and giving families access to financial services that help them move forward rather than stay stuck in the trap of predatory lending,” said Cummings, CEO of Insight Training and Educational Center, a minority-led non-profit based in Johnson City.

Fred Robinson, president and CEO of the Tennessee Credit Union League, said, credit unions are member owned, not-for-profit, financial cooperatives that believe in the motto of “People Helping People.”  “ACFCU is a shining example of a credit union that is true to its mission by providing access to mainstream financial services like home ownership and financial literacy to the underbanked,” Robinson said.

A centerpiece of ACFCU’s CDFI funding application was a plan to expand ACFCU’s “80/20” mortgage product – something that opens the American Dream of homeownership to a much broader cross-section of the region’s population. ACFCU’s second mortgage allows qualified families to access funds, through a second mortgage, for a home downpayment.

The 80/20 program augments the work ACFCU is doing through its $2.1 million “Project Reinvest” downpayment assistance grant, a two-year program that is helping 200 families each with $10,500 in assistance. With assets of more than $206 million, ACFCU serves members in Northeast Tennessee, Southwest Virginia and Eastern Kentucky.

More than 1,100 CDFI’s, many of them loan funds, exist nationwide. The program was created in the 1990s to address lack of access to capital investments for small business and over-reliance by families on payday lenders and check-cashing outlets. The National Federation of Community Development Credit Unions estimates that for every $1 of public funds, CDFI credit unions leverage at least $12 of private capital.

ACFCU is one of just three credit union CDFIs in the region, and the only one to receive a CDFI fund award. Only 49 credit unions nationwide received awards. A total of $166.3 million was awarded to 224 CDFIs, with the maximum awards totaling just under $1.1 million.

“Our continuing journey as a mission-driven, socially responsible financial cooperative is not an easy one,” Scott said. “But without ACFCU, the 27 percent of unbanked or underbanked people in our service area have little choice but to turn to predatory lenders.”

The CDFI fund’s director, Annie Donovan, lauded the work of CDFIs in a Sept. 28 address at the Opportunity Finance Network conference. “CDFIs are reaching into far corners, to the places that are hardest to serve,” Donovan said. “CDFIs are breaking down barriers, doing the things that others so often say are not possible. And it’s hard work.

“From my vantage point, I see CDFIs every day pursuing their vision of prosperity for all, not because the work is easy, but precisely because it’s hard. That’s the ethos I see when I’m out in the field.”

ACFCU has continued to broaden its array of programs and partnerships to address the deep needs in Central Appalachia, where many communities have struggled to replace jobs lost by the decline of the coal industry and other economic shifts. Its strategies include:

“We’re grateful to the CDFI fund for funding our application and look forward to leveraging the award to serve families and businesses in our communities,” Scott said.

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