Opening Remarks for the Inclusiv General Session :

Overcoming Economic Barriers in the Deep and Mid-South:

The Role of CDFIs and Mission-Driven Credit Unions

May 2, 2023

The Peabody Hotel

Memphis, TN

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Good morning, everyone.

Memphis

There is no better place to face down the barriers to economic mobility than Memphis. The day before he was murdered, Dr. Martin Luther King opened his speech to Memphis’ striking sanitation workers by saying:

I’m delighted to see each of you here tonight in spite of a storm warning. You reveal that you are determined to go on anyhow. Something is happening in Memphis, something is happening in our world.

I hope not to diminish or disrespect the gravity of Dr. King’s words by suggesting a certain resonance of those words today – the people in this room who seek to improve the lives of people with low-incomes and communities of low-wealth are facing our own storm warnings. . . that this conference is potent evidence of a collective determination to move forward . . . that there we stand at a crossroads filled with the promise that powerful change can be realized in  our world.

Over the span of the pandemic – the three tumultuous, disruptive, and painful years – each of us has changed as we moved through the attendant storm clouds. Each in our own way has witnessed the profundity of personal loss … the pervasive hardships of economic dislocation … the power of protests in the streets over police violence and the murders of Black Americans … the horrendous spike in hate crimes against Asian Americans … the heightened de-humanization of trans people … the unrelenting destabilization of democratic norms and institutions  . . .

All of this has laid bare the deep and intertangled root system of racial inequity and injustice that insidiously feeds and corrodes our systems of health, education, law enforcement, economic opportunity, civic participation, and so much else.  All of this has spoken to why you do the work you do. Because the work you do is inspiring . . . courageous . . . And vitally, vitally important. Thank you.

The Federal Moment

The extraordinary aspirations of ARPA, the Infrastructure Act, the Inflation Reduction Act, and the CHIPS Act translate into an unprecedented moment of opportunity for community development credit unions. I applaud Inclusiv and its members for stepping forward to embrace that opportunity.

Your efforts in shaping the Green House Gas Reduction Fund have been an important contribution to the future of climate change finance and your members are well-suited to help deploy this historic investment.

Your efforts in promoting secondary capital as a tool to grow your organizations and better serve your members led to the creation of the ECIP program. We were proud to partner with you all on this initiative and thrilled with the resulting federal policy that brought over $2 billion in capital into the community development finance sector.

And your work in Puerto Rico with the co-operativas has led to a renaissance of the cooperative movement on the island, bringing desperately-needed capital to the communities so devastated by the recent hurricane. Your leadership is inspiring.

Inclusiv

Kresge is proud to have been a partner with Inclusiv.

 We’ve supported connecting social service entities with community development credit unions;

 We’ve invested secondary capital in Hope Credit Union to ensure Memphians living in neighborhoods near the Crosstown development would have local branch access;

 We’ve worked with Inclusiv to create the Southern Equity Fund, the first multi-investor fund for secondary capital investments;

 We’ve advocated with EPA to ensure that the $27 billion Greenhouse Gas Reduction Fund results in landing low-cost lending capital in projects that help disinvested and marginalized communities mitigate and adapt to the adverse effects of climate change.

 And we’ve watched with admiration Inclusiv’s work to help dramatically increase the number of CDFI Fund awards for cooperativas in Puerto Rico.

Call to Action

So what is the path forward?

First, promoting equitable community development.

We believe that access to safe and responsible financial services that are accountable to members are of pivotal importance to creating opportunity for low-income people in America’s cities.  Your work, and the work of credit unions nationally provide that access to millions of people across the country.

This is the bedrock of the credit union movement. Communities of people with a shared interest, banding together to promote shared prosperity and to tackle problems that no individual member could accomplish alone. In the face of the most recent banking crisis, credit unions offer a powerful and alternate example of how financial services can be safe, sound, and work for the betterment of society.

The opportunity and need are enormous, and your partnership is more important than ever. In the face of unprecedented federal investment flows, credit unitions can seek and ensure the equitable distribution of these resources by actively engaging on behalf of your membership, in both shaping and deploying the federal program dollars.

For example, the SSBCI program has resourced states with $10 billion in federal funds, all with the goal of supporting small businesses. Although the program looks different in each state, all states need credit unions to step up and participate. There are collateral support programs, loan guarantees, venture funds, and other efforts that all need financial institutions with which to partner. You can ensure that the members most in need of these resources gain access.

Similarly, tens of billions of dollars have begun, or will shortly begin, to flow into infrastructure projects across the country. Even those much of this capital will flow to large contractors, there are thousands of small- to medium-sized firms led by people of color who want to compete for these projects, but who need access to do it. Credit unions can, and should as a matter of equity, focus on their small business customers who are attempting to access these contracts and create the lines of credit, equipment finance loans, and other tools these firms will require to compete.

These are only two of the hundreds – actually, more like thousands – of opportunities that await credit unions and their members – all of which hold the potential to drive the equitable outcomes we seek.

Second, engaging the challenges of climate change.

The only way the country can reach its climate and clean energy goals and the Biden administration reach its Justice40 goals, is if each of you serving a low-income community or a community of color begin and scale the availability of lending programs and products for your members.  There are incredible opportunities in this space and a great need to ensure the communities we all serve are not left behind.

There are products and models to follow.   And it isn’t that hard.  Who better to lend to lower income individuals and people living in banking deserts and underserved communities than all of you. You already provide the credit support, access to banking services and loans.  Now the people you serve need access to products to conduct energy efficiency work, electrify appliances and HVAC, even install panels or heat pumps.

Closing

It is no news to the people in this room that the credit union movement has been undergoing rapid change over the last few decades.  The consolidation or closing of many credit unions as well as that shift in charters from common bond to community based has created, at times, an identity crisis in the movement.  Who we are and what we stand for is a question every organization must answer for itself but within the movement, I urge you to band together and seize this opportunity to reinvent the future of community development finance in this country based on the co-operative spirit that brought you all here today.

And Kresge will be with you along the way.  

As Dr. King said in his speech just blocks from here:

Let us rise up tonight with a greater readiness. Let us stand with a greater determination. And let us move on in these powerful days, these days of challenge to make America what it ought to be. We have an opportunity to make America a better nation.

Thank you. And very best wishes for a productive conference.

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