According to the U.S. Department of the Treasury CDFI Fund, CDFIs “share a common goal of expanding economic opportunity in low-income communities by providing access to financial products and services for local residents and businesses.”

CDFIs began in the 1880s when the first minority-owned banks focused on low-income areas. Since then, CDFIs have evolved to include credit unions in the 1930s and loan funds in the 1980s. Today, there are four types of CDFIs, including banks, credit unions, loan funds and venture capital funds. Approximately 1,000 CDFIs operate nationwide.

The foundation currently invests in one CDFI, Self Help Credit Union. Provided the foundation’s positive experience with this CDFI, I’d like to elaborate further on the characteristics of a CDFI credit union.  Similar to how a traditional bank delivers services to its customers, a CDFI credit union provides financial services to its members. From an oversight perspective, CDFI credit unions are regulated by the National Credit Union Administration (“NCUA”), an independent deferral agency, just like banks are regulated by the Federal Reserve System. So, if a CDFI credit union member deposits $250,000 with her credit union, then that deposit is fully backed by the NCUA. Comparatively, if a bank customer deposits up to $250,000 with her bank, then those dollars are insured by the Federal Deposit Insurance Corporation (“FDIC”). As you can see, from a safety/regulatory standpoint, CDFI credit unions and traditional banks are comparable.

Financially, CDFI credit unions are competitive. When I specifically compare Self-Help Credit Union’s rates to Bank of America’s rates, the credit union consistently offers more compelling rates. See below for a handful of examples as of June 2020 supporting the argument that CDFIs can make a positive financial and non-financial impact.


Self-Help Credit Union (APY)

Bank of America (APY)


Checking Account




Savings Account




36/37-Month CD/IRA




60-Month Term CD