May 29, 2020

NCUA details changes to low-income designation methodology

military memberThe NCUA Thursday issued a Letter to Credit Unions detailing its new approach to determining whether a credit union qualifies for a low-income designation by fully considering military personnel. NAFCU is supportive of the change and has defended its merit against banker attacks as it "is an important step toward promoting financial inclusion."

The NCUA explains in the letter that its Office of Chief Economist "determined that the majority of military personnel would qualify as low-income members," but the previous methodology primarily using geocoded addresses obtained from AIRES downloads excluded most military personnel. The NCUA will now consider military personnel without a street address similar to its treatment of students attending colleges, universities, vocational or technical schools.

The letter notes that this change does not add any burdens or requirements to credit unions; the NCUA will apply the new methodology to AIRES submissions going forward. If a credit union wishes to have their AIRES submission considered before the next normal cycle, they may contact the NCUA Office of Credit Union Resources and Expansion (CURE).

In addition, the Letter to Credit Unions details additional options for credit unions to submit information to CURE to demonstrate that they qualify for a low-income designation if the agency's primary methodology does not fully account for all military personnel served by the credit union.

"The NCUA is always seeking opportunities to foster greater financial inclusion, accessibility, and opportunity for all Americans," said NCUA Chairman Rodney Hood in the letter. "To that end, the NCUA’s goal in improving the low-income designation methodology is to ensure full financial inclusion for the men and women serving in our nation’s military. They keep us safe, and our commitment is to keep their funds safe."

NAFCU will continue to defend the credit union industry from the banking industry’s baseless attacks, and the association’s advocacy team will continue to work with Congress and federal regulators to advance important relief measures helpful to credit unions and their 120 million members.