ALEXANDRIA, Va.-NCUA said it has approved an additional 553 credit unions over the past month for low-income status under an initiative aimed at expanding access to capital in drought-stricken states, making those credit unions exempt from the congressional cap on member business loans.
The low-income designation also allows those credit unions to accept non-member deposits and other forms of alternative capital and make them eligible to tap into low-rate loans and technical assistance grants provided by the agency's Community Development Revolving Loan Fund.
NCUA had already approved almost 1,200 credit unions for its low-income designation, bringing the total to almost 1,700.
The expanded numbers of low-income credit unions and their ability to skirt the 12.25% of assets cap on member business loans comes as a bill to increase the MBL cap is pending before Congress. The bill, however, is not likely to pass this year, making the NCUA move more urgent for many credit unions that may be approaching the MBL cap.
While the low-income designation was traditionally reserved for community development credit unions and others primarily serving poor communities, NCUA's rules simply require that a majority of a credit union's membership meet low-income thresholds based on 2010 Census data. NCUA said as many as 1,000 additional credit unions are eligible for the designation but had not applied for the formal appellation.