ALEXANDRIA, Va. – NCUA announced an initiative with state regulators and the National Association of State CU Supervisors yesterday aimed at easing the way for state charters to qualify as low-income credit unions, which exempts credit unions from the cap on member business loans and allows them to raise supplementary capital.

Under NCUA’s rules, a majority of a credit union’s membership must meet low-income thresholds based on 2010 Census data.

State regulators can now provide limited geographic and income data to NCUA’s AIRES system when they upload their examinations. NCUA will use that data to determine if there are state chartered credit unions eligible for the low-income designation and provide a list to state regulators on a quarterly basis. State regulators have the sole authority to make the low-income designation for state chartered credit unions.

In a major push, NCUA approved 811 credit unions for LICU status last year, but only 42 of them were state charters. NCUA believes this new initiative will facilitate more state charters qualifying for LICU status.

There are now about 1,950 low-income credit unions, about 250 of which are state charters.

LICU status not only exempts a credit union from the MBL cap, but also allows it to increase its capital by offering secondary capital and accepting non-member deposits. It also qualifies a credit union to participate in NCUA’s Community Development Revolving Loan Fund, which provides low-interest loans and small technical assistance grants.

 

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