WASHINGTON (UPDATED: 2:25 p.m. ET, 9/4/12)--The Credit Union National Association (CUNA) has joined the National Federation of Community Development Credit Unions to encourage interested and eligible credit unions to accept their low-income credit union (LICU) designation before the Sept. 10 response deadline passes.
The National Credit Union Administration early last month notified 1,003 credit unions, indicating they are eligible for low-income designation. That designation brings benefits that include the ability to accept supplemental capital and an exemption from the small business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.
To qualify as a LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data.
The federation in a release noted that the LICU designation does not commit credit unions to only serving low-income members. "Don't miss a chance to gain access to regulatory powers that will strengthen your credit union's capacity to better serve your members," the federation release added.
The LICU notification initiative, which was incorporated into a relief and recovery package for drought-stricken states announced at the White House in early August, could double the number of LICUs and increase their member business lending by nearly 75%.
According to NCUA estimates, this initiative could unlock between $250 million and half a billion dollars in new, near-term business lending if all qualified federal credit unions participate. The NCUA said the expanded access to credit should translate into job creation.
Starting in October, the federation and CUNA will offer a series of monthly online events aimed at providing a more in-depth understanding of the different benefits and next steps low-income credit unions can take to maximize their impact.