Last month, NCUA sent letters to nearly 1,000 credit unions indicating they are eligible for low-income designation (LICU). That designation brings benefits that include the ability to accept supplemental capital and an exemption from the small business lending cap under certain circumstances.
For more detailed information about these authorities, click this link to take you to the August 14 Webinar the NCUA offered on this topic.
To qualify as an LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data.
Eligible credit unions must respond by September 10 in order to gain their designation as part of this fast-track process.
This is a far reaching initiative across the credit unions system, but in particular for the state of New Jersey, which will almost triple the number of LID CUs, from 8 institutions serving only 7,354 predominantly low income consumers and combined assets of just $12 million to 31 institutions serving near 100,000 consumers and with aggregate assets of $650 million.
Twenty-three N.J. credit unions that qualify for the LICU designation were contacted by NCUA through this initiative:
If your credit union is eligible for this designation, we urge to take action and respond to NCUA by September 10. There is no cost to accepting the designation, and doing so does not commit credit unions to exclusively serve low-income members but rather to continue striving to meet the needs of their entire membership while focusing on the particular needs of this population.
The National Federation of Community Development Credit Unions (Federation) will host a Webinar on September 25 (click here to register) that will provide an overview of the low-income designation.