CUES Podcast - CUES Podcast Episode 72: CDFI Status Is a ‘Carrot’ for Innovation—and a Possibility for More CUs Than You Might Think, an Interview with Jamie Strayer

CUES Podcast Episode 72: CDFI Status Is a ‘Carrot’ for Innovation—and a Possibility for More CUs Than You Might Think, an Interview with Jamie Strayer

05/20/19 • 37 min

Many mainstream credit unions have long thought that community development financial institution status wasn’t something they could or should consider. Our guest, Jamie Strayer, ICUDE, would beg to differ.

Founder of CU Strategic Planning, Tacoma, Washington, Strayer says CDFI status is a great thing for CUs’ ROA, members and communities, as well as for U.S. taxpayers. Strayer knows a lot about it because she has helped CUs get $103 million in CDFI funding in the last 10 years.

“That funding produced $5 billion in loans that the credit unions otherwise would not have done,” she explains. “High-yield lending with every penny covered by loan loss reserves drives ROA.

“And this is where is gets really good,” she adds. “That ROA allows them to grow faster. They can accept more deposits while preserving their net worth. When they approve those loans, people tell their friends and family, ‘That credit union gave me a loan. You should go there.’ The organic growth occurs without spending more money on marketing. This program is rocket fuel for growth for credit unions.”

Strayer also says that the CDFI program reduces the number of people on federal entitlements. If a CU can make a car loan to a low-income worker, for example, that person may be able to stay off unemployment.

“CDFI status is the carrot for trying something new and even inventing new financial products,” Stayer adds. “What’s to prevent a credit union from trying something new when they’re not going to lose even a penny?”

The show also gets into:

· The difference between CDFI status and a low-income designation

· The seven criteria for CDFI status—and how CUs almost always automatically qualify on six of them

· Statistics about how much CDFI status boosts CU ROA

· What to consider before applying for CDFI status

· The current political situation around the CDFI fund

· The most inspiring CDFI project Strayer has worked on in her career

· What you’ll get if you attend Strayer’s session at Execu/Net in August in Big Sky, Montana

Links:

· U.S. Treasury CDFI status

· NCUA low-income designation

· CU Strategic Planning

· Execu/Net

“That funding produced $5 billion in loans that the credit unions otherwise would not have done,” she explains. “High-yield lending with every penny covered by loan loss reserves drives ROA.

The show also gets into:

· The difference between CDFI status and a low-income designation

· The seven criteria for CDFI status—and how CUs almost always automatically qualify on six of them

· Statistics about how much CDFI status boosts CU ROA

· What to consider before applying for CDFI status

· The current political situation around the CDFI fund

· The most inspiring CDFI project Strayer has worked on in her career

· What you’ll get if you attend Strayer’s session at Execu/Net in August in Big Sky, Montana

Links:

· U.S. Treasury CDFI status

· NCUA low-income designation

· CU Strategic Planning

· Execu/Net

Previous Episode

CUES 71: The Magical Point of Confluence Between Diversity and Inclusion, an Interview with Jerlando Jackson

Our guest, organizational scientist Jerlando F. L. Jackson, Ph.D., lives by the mantra, “Organizations are made up of people. It is the people and their decision-making that we want to change.”

The Vilas distinguished professor of higher education and the director and chief research scientist of Wisconsin’s Equity and Inclusion Laboratory at the University of Wisconsin-Madison, Jackson starts off the show by defining the difference between “diversity” and “inclusion.”

Diversity, he says, includes the full spectrum of human differences, such as race, religion, gender, sexual orientation, socio-economic situation and political beliefs. He also says it’s valuable to consider lifestyles, family composition and education level.

“Inclusion is very different,” he explains. “It is not simply compiling a list of diverse characteristics, but rather an ability to cultivate a sense of community. An inclusive organization promotes and sustains a sense of belonging. It values and practices respect for the talents, beliefs and backgrounds as well as the ways of living” of its customers and staff members.

The magic comes from committing to both diversity and inclusion, according to Jackson. “When an organization commits to diversity and inclusion, it manifests itself through a bold mission, strategic priorities and high impact practices to support a diverse workplace and leverage the effects of diversity to achieve a competitive advantage with a highly skilled workforce and a capacity to relate to the full spectrum of customer.”

What’s the first step if you’re thinking of launching a D&I program at your CU? Jackson recommends an assessment of your culture and readiness.

In the show, Jackson also provides: five ways you’ll benefit from prioritizing D&I; five roadblocks you’re likely to encounter when launching a D&I initiative; and three powerful statements worth considering about D&I.

Links:

JCF LLC
Email Jerlando F. L. Jackson, Ph.D.
Coming soon: Organizational Disparity Institute
Inaugural Diversity Insight column, “Not Intentionally Inclusive = Unintentionally Exclusive”
Subscribe to CUES content emails to get a link to our monthly Diversity Insight column delivered to your inbox

Next Episode

CUES 73: How to Smash a CEO Interview—an Interview with Deedee Myers, Ph.D., and Peter Myers

A lot of work and preparation goes on before a credit union board interviews a candidate it is considering as a possible next CEO.

The board has considered multiple resumes, decided what questions to ask (and which director will ask them), and oftentimes spent time consulting with an executive search consultant. The candidate has gathered a wealth of experience, gone through such key development opportunities as CEO Institute, and committed to taking his or her career to a whole new level.

If you are the interviewee, how can you hit the ball out of the park in your interview for the top job? In this episode, you’ll get guidance from Deedee Myers, Ph.D., and Peter Myers. They are CEO and SVP, respectively, of DDJ Myers, Phoenix, CUESolutions provider for succession planning, executive recruitment, leadership coaching. Both Deedee and Peter have supported many CEO searches.

Deedee emphasizes early in the show that the point of a first-round interview is to get the second-round interview. “It’s not to get the job, it’s to get through the gate,” she says.

Peter says preparing for the interview should include a deep dive into the organization conducting the interview. Looking at that CU’s National Credit Union Administration past and current call reports is a good step.

“What really high-caliber candidates do is they paint a picture of where [the organization has] come from leading up to the current state,” he explains. He also suggests asking any executive search consultant involved in the process about the board members, their hot buttons and the CU’s business model.

Lastly, have some open-ended questions you want to ask the board, like what they are afraid of, he advises. “You want to ask questions that the board might have to think about or even talk about among themselves.”

The show also gets into: