Commodore Perry Federal Credit Union was awarded an $875,000 grant through the U.S. Department of Treasury Department’s Community Development Financial Institutions Fund to increase economic opportunities for low income people in Ottawa County.
The grant will be used to give people in Ottawa County the opportunity to receive access to technical school training, which increases wages in the county by 70%, according to the American Community Survey.
The grant program is in partnership with Terra State Community College, EHOVE, Benton-Carroll-Salem Schools, Port Clinton City Schools and Ottawa County Improvement Corporation.
“Commodore Perry exists to help the hard-working people of Ottawa County,” said Mike Barr, President/CEO. “As a not for profit, our credit union is committed to helping people to help themselves get to a better place in their lives.”
Barr additionally shared the broader impact to the region’s economy. “Technical certifications create a skilled workforce that attracts new businesses and helps existing businesses to grow, giving low income workers a path to higher wage jobs,” he said.
The not-for-profit credit union will leverage the grant to offer two products not provided by any other financial institution in the state, a Wage Replacement Loan and a Career Training Loan.
The products help unskilled workers overcome a barrier to accessing higher wages through technical training. They need training to access higher paying jobs, but can’t afford to take time away from a minimum wage job to attend a training program.
Commodore Perry’s innovative Wage Replacement Loan is a first of its kind in the country. Financial institutions do not offer a loan to support a consumer in leaving a job or reducing hours. The credit union is additionally offering a Career Training Loan to address the funding barrier to pay for the training.
Traditional forms of financial aid and student loans typically can’t be used for certificate programs. According to the U.S. Department of Education, the most common federal need-based aid, the Pell Grant, requires programs of at least 600 hours or 15 weeks in length, which excludes most certification courses. Programs must additionally be degree earning, which certificate programs leading directly to jobs are not.
The Department of Treasury established the CDFI Fund in 1994 to provide affordable credit, capital and financial services to underserved populations and distressed communities. It receives bipartisan support and has thrived through both Democratic and Republican administrations, in part because it encourages independence and creates jobs, increases private investment in communities and is methodically measured to produce results without creating dependency. With the announcements of these awards the CDFI Fund has awarded $1.96 billion since inception.
The funding is a part of a nationwide round of awards to organizations like Commodore Perry totaling $202.2 million to 302 CDFIs serving struggling communities in states across the country. It made history as one of only 48 credit unions nationwide to receive the U.S. Treasury grant.
The U.S. Treasury awards the grant funds to financial institutions documenting service to low income and distressed communities. Seventy percent of Commodore Perry’s members are low income, earning less than $53,346. According to the United Way of Ohio’s ALICE report, that is not enough for a basic survival budget for a family of four, which is $56,700.
More information on Commodore Perry’s program can be found at cpfcu.coop/careertraining.