The National Credit Union Administration announced on Wednesday that its low-income credit union initiative has helped to boost the number of designated credit unions, providing communities with greater investment potential and access to financial services.
“We launched NCUA’s low-income credit union initiative one year ago, as part of my Regulatory Modernization Initiative,” NCUA Chairman Debbie Matz said. “To relieve federally chartered credit unions of the burden of determining if more than 50 percent of their members met the definition of low income, NCUA performed the analysis and then informed the qualifying credit unions. Since last August, 821 federally insured credit unions, with 11 million members and $101.8 billion in assets, have accepted the low-income designation. There are now 1,961, two-thirds of which are federal credit unions, with the low-income designation. The most recent data show these credit unions have 17.8 million members and assets of $157.6 billion.”
Matz announced the NCUA initiative last August. The agency sent letters to over 1,000 federal credit unions, notifying them of their eligibility and of the application process. To qualify as a low-income credit union, a majority of the institution’s membership must meet low-income thresholds based on 2010 Census data.
The designation exempts institutions from the 12.25 percent cap on member business lending, makes the institution eligible for Community Development Revolving Loan Fund grants and low-interest rate loans, allows institutions to accept deposits from non-members and authorizes institutions to obtain supplemental capital.