NCUA Has $1.2 Million Grant Fund for Low-Income Credit Unions

New products, technology modernization and staff training are wish-list items that low-income designated credit unions could pay for with a Community Development Revolving Fund grant.

The NCUA has a pool of $1.2 million to award to low income credit unions in round two of the 2014 grant process, and applications are being accepted through June 30.

“The reporting requirements are minimal, and the time it takes to fill out the grant is well worth the five minute investment,” said John Trull, director of regulatory advocacy for the Northwest Credit Union Association. “This is a great opportunity that all low income designated credit unions with a CAMEL 3 score or higher should take advantage of.”

“If your credit union does not have low-income designation but may be eligible, you still have time to get the designation and apply for the grant,” Trull continued.

Previous applicants need only to log in, while it takes just minutes for new applicants to register by submitting their charter number and providing a contact name, phone number and email address.

Credit unions can apply for funds in the following initiative areas:

CDFI Certification: $150,000 available for CDFI certification which will fund up to 60 awards at $2,500. Credit unions receiving this funding in the first round are not eligible and credit unions already certified are not eligible. Funds cannot be used for recertification.

New Products or Services: $652,000 available which could fund up to 326 awards. The only restriction: The applying credit union must not currently offer the product. Applicants can apply for a grant to develop one of the following products/services;

  • Mobile banking – $7,500
  • Online loan or member applications – $7,500
  • Home banking – $7,500
  • Remote deposit capture – $6,000
  • Electronic/digital signatures – $6,000
  • Debit/credit/prepaid cards – $5,000
  • Bill pay – $5,000
  • First website – $2,000

Funding will be reimbursed to the credit union based on paid invoices up to the grant maximum. Recurring expenses are not eligible for reimbursement.

Staff Training: $198,000 is available for training credit union staff and volunteers. This category will fund 66 grants of up to $3,000 each. Eligible applicants will be ranked solely by asset size with funding going to the smallest asset size first. The funds can be used for eligible training, but not for travel. Funding can be used for multiple trainings, but reimbursements must be submitted to the NCUA all at once. Eligible trainings include:

  • Compliance
  • Lending and collections
  • Governance (board or volunteer)
  • Financial counselor training for front-line staff

Collaboration: The NCUA has allocated $200,000 for collaboration grants with a maximum award of $50,000. The lead applicant must be a low income designated credit union, and if awarded, the credit union would not be eligible for any other initiatives in this round. Collaboration grants are available to fund scalable, replicable, long term, and core expense saving collaboration. Collaborators can include the Association, non LICU credit unions, CUSOs and or vendors.

Collaboration grants can be used to fund three areas:

  • Back Office Operations
    • Shared staffing in compliance, HR, or Collections
    • Shared software platform
    • Shared product or service offering
  • Vendor Due Diligence
    • A credit union version of Angie’s List, or Consumer Reports
  • Secondary Capital Investment Pool
    • Funding could be used to set up a pool that provides an organized market for secondary capital, that would provide a uniform underwriting and servicing that facilitates efficient transactions and pooled risk. The goal would be to create investor confidence.

Credit unions can apply in any of the four categories but can receive funding in one.

More information about the Community Development Revolving Loan Fund grants can be found here. The application can be found online.

Questions about this story? Contact Lynn Heider: 503.350.2225, lheider@nwcua.org.

Posted in NCUA.