MADISON, Wis. – CUNA Mutual Group said this morning it has made $1.25 million of non-member deposits in three California community development credit unions to help stimulate development in their underserved areas under a state program.
The 0% deposits in credit unions are part of the state Department of Insurance’s California Organized Investment Network, or COIN, which aims to spur investments by insurers in underserved and rural communities throughout California by providing tax benefits to investors.
The three CDCUs; Northeast Community FCU in San Francisco; Faith Based FCU in Oceanside, Calif.; and Oakland’s Self-Help FCU, an affiliate of North Carolina’s Self-Help CU, each received one or two deposits of $250,000 and have the discretion about where to spend the investments in their areas to encourage community development. In return, CUNA Mutual Group will receive tax credits for their participation.
Under the COIN tax credit program, insurers can invest a minimum of $50,000 as equity or a 0% loan with a Community Development Financial Institution for 60 months. In exchange, the investor receives a 20% state tax credit. The CDFIs use these funds to fulfill their mission, by providing loans or other support to small businesses and non-profits that serve economically disadvantaged communities. After 60 months, the loans are repaid.
Several other insurers also made CDFI investments under the COIN program today, including United Health Care Insurance Co. ($2.8 million) Blue Shield of California ($1 million) CSE Insurance Group ($500,000) and several banks investing a total of $2 million.