NCUA to Award $50,000 Grant to Low-Income Credit Union

The National Credit Union Administration (NCUA) announced today that it will award a low-income designated credit union (LICU) with $50,000 in grant funding for a proposal that results in long-term savings to a credit union through collaboration.

“Pursuing collaborations and developing new and innovative best practices can assist small credit unions competing in today’s marketplace and add value to their membership,” NCUA Chairman Debbie Matz said. “This grant initiative will allow low-income credit unions to tap into their wealth of experience and create solutions to apply across the industry. In my experience, some of the best solutions come directly from members or employees.” 

To qualify, a single low-income designated credit union must partner with at least one other credit union, with the option to include other entities such as state leagues and associations, additional credit unions, credit union service organizations (CUSOs) and third-party vendors. The NCUA’s Office of Small Credit Union Initiatives (OSCUI) will accept applications from Feb. 15, 2013, to March 15, 2013. NCUA will announce the winning proposal no later than April 12, 2013.

OSCUI will evaluate applications based on the following characteristics:

  • Substantial reduction of expenses for core credit union activity through collaboration 
  • Scalable collaborations that continue to grow
  • Innovative collaborations that break new ground
  • Replicable ideas or projects that other credit unions can adopt
  • Likelihood of success based on:
    • NCUA CAMEL ratings and net worth ratios of involved credit unions
    • Financial viability of partners
    • Amount of total project cost funded by non-NCUA funds
    • Successful implementation of prior projects

For more information, a set of guidelines detailing the grant program’s requirements and selection process, as well as potential collaboration ideas, is available under the grants button at http://go.usa.gov/gwP9. A Notice of Funding Opportunity also appears in today’s Federal Register at http://go.usa.gov/4arB.

Funding for this grant is provided by the Community Development Revolving Loan Fund, which Congress created to support credit unions that serve low-income communities. NCUA’s OSCUI administers these funds under its grant and loan programs.

The grant competition is the latest in a surge of activity surrounding the low-income and small credit union designations in recent months, with the NCUA simplifying the application process for LICU status last fall before upping the small credit union asset threshold from $10 million to $50 million earlier this month.

A record 319 credit unions, for instance, have applied for planning assistance and other help through the OSCUI’s consulting program, which is available free of charge to small, new (with charters approved within the past 10 years) or low-income credit unions.

Through the consulting program, OSCUI offers budgeting, marketing, policy development and strategic planning assistance. The experienced economic development specialists that offer this assistance also help credit unions tackle other examination issues and issues related to internal controls and regulatory compliance. Assistance with net worth restoration plans or revised business plans, and consulting services to groups that wish to organize a credit union may also be provided, according to the NCUA.

This heightened interest has led to a record number of consulting program participants in the first round of 2013, with 240 credit unions taking part from January until June. A second round of the program will begin in July.

 

Questions or Concerns? Contact Matt Halvorson, Anthem Editor: mhalvorson@nwcua.org.

Posted in Advocacy News, Around the NW, NCUA.