WASHINGTON (11/27/12)--The National Credit Union Administration (NCUA) should revisit its Low Income Credit Union (LICU) designation process in 12 months' time and hold periodic reviews of its LICU policy thereafter, the Credit Union National Association (CUNA) recommended in a recent comment letter.
Overall, CUNA Deputy General Counsel Mary Dunn wrote that CUNA strongly supports the agency's proposal to extend the amount of time credit unions have to accept LICU designations to 90 days.
"There are many benefits associated with the low-income credit union designation, and CUNA wants to ensure all eligible credit unions that want to have the designation will be able to receive it," Dunn said.
At last month's open board meeting, the NCUA extended the LICU designation approval deadline by 60 days, saying the original 30-day response period was creating an obstacle for some credit unions to accepting the designation. NCUA Chairman Debbie Matz in an October release said credit unions should have sufficient time to properly assess whether to accept their offered LICU designations, and to complete their own internal approval processes, and the CUNA comment letter agreed with this agency assessment.
The LICU deadline extension proposal would also make minor technical amendments to NCUA's insurance regulation. The changes would allow the NCUA's Office of Consumer Protection, not regional directors, to designate federal credit unions as LICUs. (See related Oct. 19 News Now item: LICU-designation response time extended)
In the comment letter, Dunn said CUNA agrees with the NCUA's intention to notify federal credit unions of their low-income eligibility on a periodic basis. There should be additional opportunities to accept LICU designations in the future if a given federal credit union "does not or is not able to respond to a particular NCUA notification," Dunn said.
"In addition, NCUA should further clarify the process for the designation of low income credit unions that are state chartered, and work with state regulators to ensure the process works as well for state-chartered credit unions as it does for federally chartered credit unions," the letter added.
For the full CUNA comment letter, use the resource link.