Oct. 19, 2012 – The NCUA Board on Thursday issued a proposed rule that would give eligible credit unions 90 days to opt in for the low-income designation, 60 days longer than is currently permitted.
NCUA announced Thursday that the total number of low-income designated credit unions is now up to 1,874, while the number of federal credit unions that have accepted the designation has reached 676. NCUA notified 1,003 credit unions of their eligibility for the designation in August. Each quarter, the agency looks to identify credit unions that are eligible and notify them accordingly.
At Thursday’s NCUA Board meeting, Chairman Debbie Matz noted that the proposal to extend the acceptance deadline from 30 to 90 days stemmed from feedback the agency received from credit unions that wanted more time to evaluate the LICU option.
NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt said the association is pleased with the proposed rule. The deadline extension “allows credit unions greater flexibility and more thoughtful review in their decision-making process,” Hunt noted.
Credit unions with the LICU designation are exempt from member business lending limits; eligible for Community Development Revolving Loan Fund grants and low-interest loans; have the ability to accept non-member deposits; and are authorized to obtain supplemental capital.
For a credit union to qualify as an LICU, a majority of its membership must meet low-income thresholds based on 2010 Census data.
As a group, LICUs serve more than 7.7 million members and manage more than $66 billion in combined assets.
NCUA’s proposed rule will have a 30-day comment period following its publication in the Federal Register. NAFCU will issue a Regulatory Alert for members.