Last-Minute Application Turns into NCUA Grant for Cutting Edge Credit Union

“I see the potential to do some exciting things with the low-income designation and CDFI certification. I’d encourage every credit union to see if they are eligible.”
— Brady Howe, president and CEO of Cutting Edge Credit Union

Well, that didn’t take long.

When the National Credit Union Administration opened the application process Feb. 3 for its first round of grants to low-income credit unions, Cutting Edge Credit Union didn’t have the designation it needed in order to apply.

Ten days later — and after a process that took 90 minutes — Cutting Edge had its low-income designation in hand and applied for a grant. Last week, it was one of six Northwest credit unions awarded funds by the NCUA to train the next generation of credit union leadership or gain access to more resources to help their communities.

Pacific Northwest Ironworkers Federal Credit Union and GH Woodworkers Federal Credit Union each received $4,000 to fund student internships this summer.

Point West Credit Union, Cascade Community Credit Union, Calcoe Federal Credit Union and Cutting Edge each were awarded $2,500 to help them obtain Community Development Financial Institution certification. Once certified, CDFIs can apply for funding from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund, which awarded $184 million in 2013.

“I see the potential to do some exciting things with the low-income designation and CDFI certification,” says Brady Howe, Cutting Edge president and CEO. “I’d encourage every credit union to see if they are eligible for the low-income designation.”

John Trull, the Northwest Credit Union Association’s director of regulatory advocacy, says 29 of 66 Oregon credit unions and 23 of 106 Washington credit unions are designated as low-income. Of those, nine have obtained CDFI certification:

  • In Oregon: Maps Credit Union, Pacific Crest Federal Credit Union and Pacific Northwest Ironworkers Federal Credit Union
  • In Washington: Cascade Forest Products Credit Union, Express Credit Union, Industrial Credit Union, Newrizons Federal Credit Union and TULIP Cooperative Credit Union

“The first step in the process is getting the low-income designation,” Trull says. “In most cases, that simply involves submitting a list of members’ addresses and unique identifications to the NCUA’s office of consumer protection.”

In deciding whether to grant a low-income designation, the NCUA uses census tract data to determine the general income level in the area where members live. Essentially, more than 50 percent of members must have a family income of 80 percent or less of the median income for the area where they live for the credit union to qualify. That includes members who are enrolled as students in a college, university, high school or vocational school.

Howe says he started to work with Trull to complete the application just three days before the NCUA’s Feb. 13 deadline for grant requests.

“When I asked John how long he thought it would take, he said he thought we could get it done in less than a day,” Howe says. “At the time, I really didn’t think that was possible. But we got our designation in 90 minutes, and we were able to apply for the grant in 10 minutes. A month later, we received an award.”

Howe says Cutting Edge will now begin the process of applying for CDFI certification. That will take longer than the low-income designation, Trull says, but the benefits are worth the effort. In 2013 alone, the Northwest’s nine CDFI credit unions were awarded nearly $700,000 in grants from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund.

Newrizons Federal Credit Union received a $495,000 Financial Assistance award, for example. Financial Assistance awards of up to $2 million allow CDFIs to sustain and expand the financial products and services they offer; Newrizons is using its award to add $300,000 to its capital fund and $195,000 to its allowance for loan losses.

“The CDFI award allows us to continue to develop our trust-enhancing products, which are designed to give the underserved and overcharged the financial tools they need for financial success,” says Newrizons CEO Ynette Gibbs. “At Newrizons, we take a holistic approach to help our members become financially fit.”

The fund also awards Technical Assistance grants. Those are capped at $100,000, and can be used for purchasing equipment, paying salaries and benefits, and training staff and boards. In addition, the fund also awards Native American Assistance Program grants to CDFIs serving Native American communities.

CDFIs by definition must have a primary mission of promoting community development. Typically, CDFIs provide a unique range of financial products and services in economically distressed target markets, such as mortgage financing for low-income and first-time homebuyers and not-for-profit developers; flexible underwriting and risk capital for needed community facilities; and technical assistance, commercial loans and investments to small start-up or expanding businesses in low-income areas.

“The grants would allow us to offer some innovative products and services for our members with the greatest need that otherwise would be unsustainable for the credit union,” Howe says. “I plan to work with the National Federation of Community Development Credit Unions on the application process.”

On June 7, Trull will moderate a panel discussion about the benefits of low-income designation and CDFI certification at the NWCUA’s Directors’ Conference. The conference, which is scheduled for June 6-8, will take place at The Heathman Lodge in Vancouver, Wash.

“This is a great chance for board members to learn about the benefits of these designations,” Trull says, “and to learn more about the application process.”

For more information or to register for the Director’s Conference, go to the NWCUA’s website. For more information about what’s involved in obtaining a low-income designation or CDFI certification, contact John Trull at 503.350.2209 or

Questions about this story? Contact Gary M. Stein: 503.350.2216,

Posted in Federal, NCUA.