Joint Effort to Improve Low-Income Designation Process
Last week, the National Credit Union Administration (NCUA) announced a joint NCUA-National Association of State Credit Union Supervisors (NASCUS) effort to streamline the process for federally insured, state-charted credit unions to determine whether they are eligible for designation as a low-income credit union (LICU). A LICU designation can provide certain regulatory benefits under certain circumstances, including the ability to obtain supplemental capital and the exemption from the MBL cap.
State regulators can now provide limited geographic and income data to NCUA’s AIRES system when they upload their examinations. NCUA will use that data to determine if there are state-chartered credit unions eligible for the low-income designation and provide a list to state regulators quarterly.
The announcement notes that, state regulators continue to have the sole authority to make the LICU designation for state-chartered credit unions.
In a recent comment letter to NCUA on a related issue, the Credit Union National Association (CUNA) urged “NCUA [to] 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.”