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Julie HesseFinancial Controller
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The Cooperative Deposit and Loan Program (CDLP) is a financial program in the Diocese of Lafayette in which parishes and diocesan entities pool their respective financial resources into a common fund for investment and lending purposes. Interest is paid on the individual savings accounts and loans are made to the participating entities, which make payments of principal and interest back to CDLP. The payments of interest together with realized gains in the investment portfolio sometimes allow for Profit Sharing to be disbursed pro-rata to all participants in addition to the interest earned. The diocese participates in CDLP in the same manner and under the same procedures as the parishes and does not benefit in any way differently from the parishes. No deposits or loans are accepted or made to outside individuals or entities.
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Frequently Asked Questions
How do I make a loan from CDLP?
Projects that require permission of the Bishop and a resolution of the parish corporation will be considered in conjunction with the request made to the Bishop. All loan requests to the Bishop are to be accompanied with a Resolution to Borrow. A parish must have at least 1/3 of the necessary funds in its general savings account before a request for a loan can be made. Prior to signing any contract, the parish must demonstrate its ability to repay the loan within a stated period of time.
Do I receive the loan amount all at once?
First a church must use all of its savings; then as the project progresses, withdrawals are made for payments as needed up to the approved loan ammount. Interest begins to accrue on the loan with the first loan advance and is to be paid monthly. At the completion of the project and when all amounts have been funded, the outstanding principal balance is then amortized on a monthly repayment schedule of principal and interest.
What is the rate of interest and how long is the repayment term?
The current interest rate is 6%, and the term of the loan depends on the amount as well as the church’s ability to repay. There is no prepayment penalty for paying the loan off early.
Can my parish have a general savings account as well as a loan?
No, all excess funds of a parish are to be applied to the outstanding loan, which will serve to prepay the loan and create "loan equity". If a parish has a need for funds while the loan is still outstanding, then the amount that the loan is ahead of its amortization schedule is the amount that can be accessed.
What type of accounts are permissible?
Savings accounts, Loan Accounts, and Endowments. The establishment of endowments can only occur within CDLP and requires the approval of the Bishop. It must be for a specific charitable religious or educational purpose, and the principal/corpus is preserved and the income is used for the specific purpose mentioned in the endowment instrument.
Who draws up the endowment instrument?
After the Bishop has approved the establishment of an endowment, based on the purpose outlined in the parish’s letter to the Bishop, a document will be created by the Diocesan Finance Officer. The document is then sent to the church parish to be signed by the pastor and his two trustees and then returned for the signature of the Bishop and Vicar General.
Can funds be taken from the endowment and used for general purposes?
Endowments are established on a permanent basis with specific directions as to the use of the income that must be adhered to. The documents specify the requirements for withdrawals.