On Credit Union Day, Thursday, October 18, the National Credit Union Administration (NCUA) announced that it had received a good response to its initiative meant to cut red tape and expand the number of credit unions with low-income designation.
The NCUA indicated that just two months after it informed 1,003 federal credit unions of their eligibility to become a low-income credit union (LICU), 676 have accepted. As a group, the newly designated LICUs serve more than 7.7 million members and manage more than $66 billion in combined assets.
With those acceptances, the total number of low-income designated credit unions has risen to 1,874, according to the agency.
That news was followed up by an NCUA board action approving an extension of the amount of time credit unions have to accept LICU designation. At October's open board meeting, NCUA Chairman Debbie Matz and board member Michael Fryzel approved a proposal to extend credit union low-income designation response time to 90 days, up from 30 days. The proposal, which will be released for a 30-day public comment period, would also make minor technical amendments to NCUA's insurance regulation to reflect current agency practices. Specifically, the proposal would change NCUA insurance regulations to reflect new agency policy that allows the NCUA's Office of Consumer Protection, not regional directors, to designate federal credit unions as LICUs.
The NCUA, in a release, noted that the current 30-day approval deadline was creating an obstacle for some credit unions. Matz 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.
The LICU proposal did not address state-chartered credit unions, but the Credit Union National Association, following the meeting, said it is working with the agency to clarify the state-chartered credit union LICU approval process. State-chartered credit unions may obtain LICU designations from their respective state regulators.