WASHINGTON (6/28/11)--Starting next month, federal credit unions have a new option for providing actual income information about their members as a basis for qualifying as a low-income credit union. Back in 2008, the National Credit Union Administration (NCUA) amended its low-income rule to allow credit unions, as an alternative to relying on NCUA’s geo-coding software, the option of providing actual income information about their members as a basis for qualifying as a low-income credit union. Under this new final rule that becomes effective July 25, the NCUA will allow federal credit unions to submit an analysis of a statistically valid sample of member income data--as opposed to actual income information--as evidence they qualify for the designation. In a recently released final rule analysis, the Credit Union National Association (CUNA) has noted these key points of the new rule:
* The random sample must be representative of the membership, sufficient in both number and scope on which to base conclusions, and have a minimal confidence level of 95% and a confidence interval of 5%; and * The NCUA will evaluate the sample income data and the supporting narrative to verify it is a statistically valid, random sample.
The new rule prohibits combining a survey and loan file review. Specifically, the rule states that a credit union must draw the sample either entirely from loan files or entirely from the survey, and must not combine a loan file review with a survey. To read the entire CUNA analysis, use the resource link below.