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Ecority is an independent nonprofit, established to leverage and scale the EPA-administered Greenhouse Gas Reduction (GHGR) Fund through a national network of credit unions and CDFIs, thereby accelerating the reduction and elimination of greenhouse gas (GHG). Ecority took the initiative to create an eligible national lending intermediary when it became clear that alternative structures eligible for EPA grants were needed to provide an efficient and cost-effective way to provide financial assistance for the rapid deployment of clean energy projects. We intend to facilitate the maximum leveraging of the lowest cost funds (10-30x) sourced by partner networks via community-insured deposits. Credit unions gather their deposits from the same households and communities that the GHGR fund is targeted to help. There is no cheaper, more stable source of abundantly available private funding than the private savings deposited in the U.S. credit union system.
Through its program design, Ecority seeks to maximize the number of participating households and businesses and substantially exceed the fund’s targeted “40% of benefits” to low-income and disadvantaged communities (LIDC) as stated in the White House’s “Justice40” criteria. Simply put, a direct GHGR Fund grant to Ecority will eliminate any middleman markup of those funds which in turn, increases the number of households and projects suitable for funding.
As of this date, Ecority is composed of credit unions and CDFIs in 43 states (and growing), with a serviceable market in excess of 100 million individuals, half of which are designated as low or moderate income. Collectively, this founding consortium represents over $120 billion in assets and nearly 600 community-embedded branches.
Ecority is focused on what works. Namely, a collaborative approach, recognizing of a diverse ecosystem and the capability building necessary to address both the supply and demand dynamics in this market. In short, the public and private sectors working together, each doing what they are best suited to do, interdependently steering the market toward solving a very big problem. “Once in a lifetime” is a phrase regularly associated with the Inflation Reduction Act. Yes. And—only by engaging the necessary ecosystem to unleash the benefits that matter to all Americans, on both sides of the aisle, with emphasis on delivering tangible health, cost-saving, and economic-multiplying benefits to people in low income, disadvantaged communities.
Ecority is built upon a simple objective, made possible by decades of experience, public trust, sophisticated capabilities, infrastructure, and an aligned ecosystem: Make the financing of clean energy projects more affordable and more accessible to more people. With urgency and priority to those in disadvantaged communities who are marginalized, underserved, and overburdened by the impacts of the climate crisis. Collectively, benefiting all Americans by reducing household costs, creating hundreds of thousands of new, good-paying jobs, unleashing economic multipliers and energy independence, and fortifying our nation’s security and resilience.
No other entity is more capable, efficient and ready to responsibly steward and multiply the public funds congressionally designated to accelerate the clean energy transition. As has been our history, we will do so with fidelity and priority to the objectives of the Justice40 mandate.
Key to Ecority’s effectiveness is our unique ability to leverage the balance sheets of literally every credit union and CDFI in the nation.
We do that through the strategic management and application of loan recourse guarantees, portfolio risk management and reserves allocation, aligned with a centralized “back office” infrastructure that handles end-to-end administration, from origination to the final contractor payment. This activates the credit unions and CDFIs to do what they do best as “last mile” lenders, deploying their federally insured deposits and the local savings pool of communities, to leverage and intermediate necessary capital to the needs of their respective communities. In a word, “distribution*.” That’s how each public dollar is multiplied, recycled, making more high-impact, clean energy investments feasible, in ways that benefit more people.
*Distribution infrastructure is crucial. In this case, capital must flow from government and household savings to qualified green projects. Accountability, impact, and environmental justice, all implicit. By eliminating unnecessary middleman markups; activating a national network of credit union and CDFIs serving every U.S. state, commonwealth and territory; and working in collaboration with an ecosystem of trusted clean energy advocates and organizations; Ecority is built for the distribution demand, accountability requirements, efficiency, and impact metrics of the GHGR Fund.
As not-for-profit and nonprofit financial institutions, U.S. credit unions and CDFIs have been on the front line, pointedly charged with restoring public trust in the American financial system in the painful reset following the Great Depression, and from that time forward making money work in just, human, and accessible ways. This legacy of trust serves as a potent foundation for meeting people where they are—in community, in context—to counsel on complicated financial issues. For instance, thousands of neighborhood branches—with longstanding, trusted community presences—can be activated by Ecority to connect homeowners, tenants, developers, investors, small businesses, municipalities, and community advocates to clean energy technical assistance, education, options and opportunities because credit unions have earned their presence in the community. Activating and supporting “community” will help people save money, create jobs, and dignify the right to live, work, and gather in places that are comfortable, healthy, and breathe clean air. “Jobs” and clean air” can not only exist in the same sentence, they belong there.
Credit unions and CDFIs have a history of working collaboratively to serve and represent the rights of communities (especially people who are financially underserved), and solve problems with innovative products and operations, developed via human-centered design and for scale. Mission, innovation and effectiveness integrated in achieving exceptional regulatory performance, public trust, and accountability.
For example, Ecority consortium members have developed an operating national platform and network of approved universities and colleges now used by more than 300 credit unions and CDFIs to assist households in paying for higher education. Another example is the creation of a national platform to serve the affordable home ownership needs of suburban and rural communities with financing products for manufactured and modular housing.
These two examples, along with other demonstrated lending experiences and community-partnered distribution, give us tremendous insight, know-how, and inherent capability to build a national platform of service providers and creditors to help reduce GHG while improving the quality of life and supporting asset enhancement for low-income and financially underserved people and the communities in which they live. Ecority empowers, enables, and optimizes the legacy and capability of credit unions and CDFI on behalf of GHGRF objectives.
When you make financing clean energy projects more affordable and more accessible using locally-sourced, federally insured deposits (versus “Wall Street” loans), more people benefit, more people save money on their utility bills and transportation, community and cultural priorities are better represented, and more good paying jobs are created. Included is the elevation and meaningful advocacy of transcending issues we all care about such as justice, national security, climate resilience, economic opportunity, and healthy, affordable housing. When you make more affordable financing available in a place people know and trust, it all just works better. Collectively, this represents a big part of how we reduce greenhouse gas emissions, hit our nation’s mid-century net-zero goals, and in a way that benefits the most Americans today and for years to come.
Ecority is designed to work with a variety of investors. Using funds from the GHGRF, we will enable virtually any credit union and CDFIs to do what they do best for households and business as mission-led, community partners. Ecority will also make direct investments in GHGR Fund-eligible projects, prioritizing investments that benefit low-income and underserved communities.
The Greenhouse Gas Reduction (GHGR) Fund was designed to leverage federal funds to bring clean technologies that lower GHG and traditional pollutants to millions of homes, businesses, and communities nationwide with a special emphasis on disadvantaged communities. Applicants for GHGR Funds must meet several statutory criteria and will ultimately be charged with leveraging and distributing funds on a national level and in a manner that is accessible to disadvantaged communities. Ecority was created to provide such an option to EPA.
Ecority is a nonprofit organization established as an eligible entity as defined in the GHGR Fund in order to apply for grant funds available through the program. Ecority took the initiative to create a national lending intermediary when it became clear that alternative structures eligible for EPA grants were needed to provide an efficient and cost-effective way to provide financial assistance for the rapid deployment of clean energy projects. Furthermore, this alternative structure should have the capability of leveraging, to the fullest extent feasible, the financing and capital necessary to stimulate additional deployment of additional clean energy projects in our local communities. As of this date, a growing Ecority is composed of credit unions and CDFIs serving customers in 43 states.
Ecority’s platform and programs are designed to leverage grant funding 10-30 times using the lowest-cost capital to accelerate the adoption and deployment of eligible greenhouse gas-reducing projects. Through its program design, Ecority seeks to maximize the number of participating households and substantially exceed the targeted 40% low-income and disadvantaged communities (LIDC) goals as targeted by the EPA’s “Justice40” criteria.
The consortium of Ecority’s initial credit union partners (including some which are also community development financial institutions (CDFI)) collectively serve nearly 8 million people with a serviceable market in excess of 100 million individuals. Nearly half of this group is designated as Low and Moderate Income (LMI) households. Collectively, the initial group of credit unions and CDFIs are accountable for over $120 billion in assets and operate in 43 states with a network of nearly 600 community branches. Ecority’s model provides scale, low funding cost, and national distribution capability.
Credit unions serve member-owners with a mission of creating a source of savings and loans for provident and productive purposes, especially for those of modest means. Credit unions gather their deposits from the same households and communities that the GHGR Fund is targeted to help. The facts are plain and clear. There is NO cheaper, more stable source of abundantly available private funding than the private savings deposited in the U.S. credit union system.
Ecority has developed an organizational structure that will assist the EPA in meeting the goals of the GHGR Fund in CAA section 134 through a well-established and proven platform. Ecority has designed and is now developing a scalable, low-risk loan origination and servicing platform to perform valuable administrative functions that are important to processing and servicing loans to consumers and assisting in performing key reporting and risk management activities. Ecority’s platform will be made available for use by a nationwide network of credit unions and CDFIs to service consumers in their respective communities. The loan origination and service platform will allow credit unions and CDFIs efficient, low-cost access to a federally supported loan guarantee organized and managed by Ecority as the eligible EPA grant recipient.
Experience Counts. Credit unions and CDFIs have a long history of collaborative experience designing and successfully implementing financing solutions in different consumer and commercial product markets. This demonstrated track record of experience and collaboration enables a unified approach across its vast existing distribution network of local, safe, sound, and regulatory-compliant lenders, setting the Ecority platform apart from other entities interested in being one of EPA’s eligible award recipients. For example, Ecority members have developed an operating national platform and network of approved universities and colleges now used by more than 300 credit unions and CDFIs to assist households in paying for higher education. Another example is the creation of a national platform to serve the affordable home ownership needs of suburban and rural communities with financing products for manufactured and modular housing.
These two examples, along with other demonstrated lending experiences and community-partnered distribution, give us tremendous insight, know-how, and inherent capability to build a national platform of service providers and creditors to help reduce greenhouse gas and traditional air emissions while improving the quality of life and supporting asset enhancement for low-income and financially underserved people and the communities in which they live.
Ecority will submit an application, consistent with EPA’s as-yet-unreleased Notice of Funding Opportunity (NOFO), which will generally follow the following model:
First, Ecority will propose to maximize the leverage of grants through a loan guarantee program that will allow for the increased deployment of private capital. This properly designed loan guarantee framework administered by an eligible recipient acting as an intermediary for a consortium of credit unions can be the most efficient way to make grants from the GHGR Fund.
The source of public funds used for leveraging the GHGR Fund is a critical design element. Federally insured deposits sourced from not-for-profit credit unions provide the lowest cost and maximum potential leverage of GHGR Fund grants. Higher-cost capital will add considerable costs to households and communities and ultimately dilute the GHGR Fund’s reach, resulting in the participation of fewer households and communities (and substantially fewer low-income and disadvantaged community participants).
Ecority’s design places credit unions and CDFI local savings pools at this foundation. It will allow for rapid expansion of the supply of loanable funds to low-income and disadvantaged consumers in the marketplace by a factor of 10 to 30 times the funds allocated to such a program. It is a highly effective way to leverage and partner funds from the GHGR Fund with funding from the private sector. Local funding for local lending will come from an existing network of trusted local financial institutions. The benefits of intermediation are leveraged within the community and at lower transaction costs.
Second, to ensure that the GHGR Fund resources can directly reach consumers in low-income and disadvantaged communities, Ecority will propose to administer grant funds to backstop the cost of improvements. This program, when combined with the loan guarantee program, will protect low-income participants from incurring negative financial consequences, including increasing debt they cannot support. By assuring reduced risk for consumers in low-income and disadvantaged communities, the GHGR Fund can facilitate a significant increase in use of qualified clean energy technologies and measures under the program. This backstop funding may be the critical determinant of whether clean energy technologies and measures are widely adopted at a rapid pace in low-income and disadvantaged communities.
Several important details relating to the structure and content of Ecority’s submission to the EPA will depend on the information that EPA has not yet provided to the public. Notwithstanding these uncertainties, Ecority has developed a model grant applicant profile to maximize the benefits of deploying capital subject to the GHGR Fund.