Expanding Financial Inclusion in West Virginia: The Role of CDFIs and MDIs

By Crystal Good

This story was first published in November 2023.

West Virginia is not known for innovation, but my mountain people have been innovating for a long time – I see it every day in others and the innovation driving Black By God. And in my little valley between a railroad and a river that is BBG’s home base lies a little credit union aptly named “Element” in Charleston.

Element is a story of resilience, innovation, and a commitment to uplifting marginalized communities. Few know that Element’s CEO, Linda Bodie, made history in 2009 by earning the “Online Banking Report: Best of the Web” award for launching the first remote deposit capture application. Element again made history during the pandemic by securing a substantial medical marijuana banking contract with the state of West Virginia, beating the $2.6 trillion corporate giant JP Morgan Chase. 

Element is at the heart of this transformation as a Community Development Financial Institution (CDFI). Their CDFI designation was approved as well as a $500,000 investment to get started. 

In tandem with the development and understanding of Element’s CDFI possibilities and requirements is their pursuit and hope to become the second Minority Depository Institution (MDI), a dynamic duo poised to reshape the financial landscape of the Mountain State. 

---

“CDFIs play a vital role in empowering underserved communities, and pursuing Minority Depository Institution (MDI) status offers a unique opportunity to further our mission of financial inclusion and support for minority-owned and underserved communities. Potential MDI status will enhance our commitment to economic empowerment, strengthen community partnerships, and expand access to financial resources for those who need it most.”

— Linda Bodie, CEO + Innovator at Element Federal Credit Union

---

Note: Hilltop, WV’s West Virginia State Convention Credit Union is the only MDI in the State of WV with roughly 200 members. There are eight CDFI’s in the state of West Virginia.

Like many states in America, West Virginia has its share of financial disparities. For years, marginalized communities, particularly BIPOC (Black, Indigenous, and People of Color) individuals, have faced significant challenges when accessing traditional banking services. A substantial portion of the population remains unbanked or underbanked, lacking access to essential financial resources.

What Are CDFIs?

Community Development Financial Institutions (CDFIs) are specialized, community-based financial institutions that aim to promote economic development by providing financial products and services to people underserved by traditional financial institutions, particularly in low-income communities. CDFIs include community development banks, credit unions, and non-regulated institutions such as non-profit loan funds or venture capital funds. 

Statistics tell a sobering story: In West Virginia, nearly 19% of Black residents remain unbanked, according to the Federal Deposit Insurance Corporation (FDIC), and 4 out of 10 Black Americans are unbanked. This means they need affordable access to essential financial services that most take for granted, such as checking accounts, savings accounts, and fair-interest credit options. It’s a situation that perpetuates cycles of financial instability and limits opportunities for economic growth and prosperity.

Enter the CDFIs – a lifeline for underserved communities across West Virginia. These financial institutions are dedicated to providing affordable and responsible financial services to those left behind by traditional banks. With eight CDFIs already established in the state, they have been instrumental in addressing the financial needs of low-income individuals, small businesses, and communities.

CDFIs in West Virginia:

• Community Works in West Virginia, Inc. (Charleston)
• Element Federal Credit Union (Charleston)
• Partner Community Capital, Inc. (Charles Town)
• Pioneer Community Bank, Inc. (Iaeger)
• Pioneer Community Group, Inc. (Iaeger)
• The Center for Rural Health Development, Inc. (Hurricane)
• The United Federal Credit Union (Morgantown
• Woodlands Community Lenders (Elkins)

With the newest player, Element Credit Union, fresh hope and innovation have entered the scene. 

Element secured a significant grant of $500,000 (DATE) from the Community Development Financial Institutions Fund (CDFI Fund). This injection of funds empowers Element Credit Union to expand its reach and impact in the state, particularly in underserved and BIPOC communities.

What sets Element Credit Union apart is its ambitious pursuit of becoming a Minority Depository Institution (MDI).

What Is an MDI?

The National Credit Union Administration defines an MDI as a federally insured credit union in which a majority of its current members, its board of directors, and the community it services, as designated in its charter, fall within any of the eligible minority groups as defined in federal law: Black American, Asian American, Hispanic American, or Native American.

An MDI is a specialized financial institution that promotes economic inclusion and reduces financial disparities among minority communities. To earn the MDI designation, Element Credit Union works diligently to ensure that at least half of its membership consists of BIPOC individuals.

This commitment to diversity and inclusion is not merely a bureaucratic requirement but a reflection of Element Credit Union’s core values. Element’s pursuit of an MDI status will better equip them to provide essential financial services to communities historically excluded from the economic mainstream. This includes offering affordable loans, accessible banking services, and financial education programs tailored to the unique needs of BIPOC individuals and communities.

---

This article uses information from Element FCU, the NCUA, and the Opportunity Finance Network. 

Full disclosure: Crystal Good serves on the Board of Directors for Element FCU.