NCUA, NASCUS Partner in State-Chartered Low-Income Initiative

The National Credit Union Administration (NCUA) and the National Association of State Credit Union Supervisors (NASCUS) announced yesterday that they will work together to give state chartered credit unions new opportunities to receive the Low-Income Credit Union (LICU) designation.

The announcement comes on the heels of the NCUA’s Troubled Condition Rule, which had created some friction between NASCUS and the NCUA after the NCUA took the responsibility of the final CAMEL determination for federally insured state charters away from the state regulators.

This announcement had been expected since last year, when the NCUA sent thousands of letters to federally chartered credit unions asking if they would like to opt in to the LICU designation using a vastly simplified process. The new partnership is expected to give state-chartered credit unions the same opportunity.

Over the past couple of months, the Northwest Credit Union Association (NWCUA), in conjunction with the Credit Union National Association (CUNA), has developed its own method for analyzing state-chartered LICU eligibility using Project Zip Code data.

Despite being limited to analyzing data only for credit unions with up-to-date Project Zip Code results, the Association assisted four Northwest credit unions in obtaining their LICU designation in the past month and helped two more identify alternative paths to receive the designation.

“In one case, the process from start to finish took less than a day to complete,” said John Trull, director of regulatory advocacy for the NWCUA. “That is amazingly fast considering two separate government agencies are involved in the approval process.”

In both Oregon and Washington, a LICU designation provides the same regulatory benefits to qualifying state-chartered credit unions as qualifying federal charters. Some of the benefits include:

  • Eligibility for Community Development Revolving Loan Fund grants and low-interest loans;
  • Ability to obtain supplemental capital;
  • Exemption from the 12.25 percent statutory cap on member business loans (MBL); and
  • Ability to accept non-member deposits from any source.

Follow the instructions below to find out if your credit union qualifies. Credit unions that fail to meet the criteria on the first run may able to achieve the designation by identifying members that are attending university or are between the ages of 14 and 18.

Does Your Credit Union Qualify?

The easiest method for obtaining the LICU designation is to email a list of member addresses to the NCUA Consumer Access Analyst Annette Moore using the following two steps:

  1. Request an Aires Download containing each active member’s address.
  2. Send an excel spreadsheet with the following five pieces of information in their own separate columns: unique ID number, address, city, state, and zip code.

Tips and Best Practices

  1. Ensure closed accounts are excluded and ensure the number of records closely agrees with number of members reported on 5300 Call Report.
  2. Provide the member’s physical address versus a P.O. box, or obtain physical address from member if possible before emailing the file.
  3. Only include a member once, regardless of how many share type accounts he or she has. It is okay for more than one member to have the same address.
  4. If joint owners are also members, the joint owner’s address should be included.

If the above does not result in a credit union receiving the LICU tag, one of four options may provide an alternative path, though credit unions should still contact Annette Moore before pursuing any of the following methods:

  1. 100 percent loan review, which must include enough member loans that the outcome shows more than 50 percent of total members qualify;
  2. 100 percent membership survey, which should include income ranges;
  3. Combination of a 100 percent loan review and a 100 percent membership survey, so long as no member is included more than once; or
  4. Statistically valid sample, which can be used when membership is large enough to make completing a 100 percent loan or membership survey cost prohibitive. The sample must be either entirelyfrom loan files or entirely from a membership survey, and loan file reviews cannot be combined with a survey.


Questions? Contact Director of Regulatory Advocacy John Trull: 503.350.2209,

Posted in NCUA.