The NCUA has notified more than 1,000 credit unions this week – including 36 here in Virginia – that they are eligible to be designated as a Low-Income Credit Union (LICU), because 50.1% of its membership is domiciled in areas meeting defined low-income criteria, based on 2010 census data.
Formal letters were mailed to the credit union’s Chairman and e-mails were sent to the CEO. Once receiving the designation, a LICU credit union will be authorized to:
- Receive an exemption from the aggregate limit on member business loans;
- Offer secondary capital accounts;
- Accept non-member deposits from any source; and
- Obtain services from the Office of Small Credit Union Initiatives (OSCUI) which provides access to low-interest loans, grants, and consulting.
Naturally, the bankers accused NCUA of using the drought to skirt MBL limits. (The LICU promotion program was part of a drought relief measure floated by the Obama Administration.)
This LICU effort is in no way, shape or form a substitute for raising the MBL cap. Our legislation to do just that languishes in Congress. Help us get that measure moving bycontacting Sens. Webb and Warner today via e-mail.
The NCUA has put together a Frequently Asked Questions publication with details for credit unions interested in the LICU designation. Credit unions should notify NCUA’s Office of Consumer Protection in writing or e-mail to DCAMail@ncua.gov by Sept. 10, 2012, if they desire to opt-in to the program and receive the low-income designation.
NCUA intends to assess eligibility each quarter and then notify any newly eligible credit unions of their ability to receive low-income designation. There are no special reporting requirements for LICUs, according to NCUA and the designation would become effective immediately upon NCUA’s acceptance of an eligible credit unions notice to opt-in.