NCUA Letter to FCUs in the Works on Low-Income Designation
The National Credit Union Administration (NCUA) will soon be sending letters to nearly 1,000 credit unions indicating they are eligible for low-income designation, a status whose benefits include the ability to accept supplemental capital and an exemption from the small business lending cap under certain circumstances, NCUA Chairman Debbie Matz told league presidents attending the American Association of Credit Union Leagues (AACUL) summer meeting in Chicago.
“Almost 1,000 credit unions would meet the Low-Income Credit Union (LICU) designation but don’t have it,” Matz said. “I know with some credit unions there’s a stigma to a low-income designation. I hope you will help them get over that,” she told the league presidents.
An NCUA letter to these eligible credit unions is expected soon. NCUA is providing the list of the credit unions to Credit Union National Association (CUNA) before the agency letter goes out, and as soon as CUNA has the list it will be shared with leagues.
NCUA's action will give eligible credit unions a greater awareness of their options and will help them make a more informed decision. Many credit unions that desire more member business lending authority or supplemental capital will not qualify as LICUs, so the agency's action should have no bearing on the need for Congress to pass these two very important pieces of legislation. – NewsNow