NCUA News Release

NCUA Releases Community Development Credit Union Examiner Guidance White Paper

NCUA Chairman Johnson Says Document Will
“More Effectively Provide Guidance for Examining Community Development Credit Unions”

Alexandria, VA, February 1, 2005 – In an NCUA Letter to Credit Unions, National Credit Union Administration (NCUA) Chairman JoAnn Johnson issued the agency’s new examiner guidance white paper entitled, “Supervising Community Development Credit Unions – Balancing Their Mission and NCUA’s Regulatory Responsibilities.”

“I appreciate the dedication and thorough consideration of the community development credit union officials who provided advice and guidance to our staff on the issues affecting these institutions. This effort created quality results for a more effective supervisory program, which recognizes their mission and the NCUA’s regulatory responsibilities,” said Chairman Johnson.

The guidance follows Chairman Johnson’s directive to seek input from community development leaders and NCUA examination staff, focusing on enhancing communication and exploring opportunities and challenges for community development credit unions.

The paper details the characteristics of well-managed community development credit unions (CDCU), CDCU members, and examining non-traditional underwriting, effective collection programs, impact of non-member deposits, and highlights the value of the NCUA’s Community Development Revolving Loan Program, and the preservation of community development credit unions.

“Community development credit unions are often the only financial source for residents, especially in underserved neighborhoods,” said Chairman Johnson. “One of the primary reasons for the creation of these credit unions is to extend access to affordable credit for people of modest means. This paper will be a guide for our entire examination team as they consider the challenges of community development credit unions. Together, we mutually agree that it is important to ensure that community development credit unions have the financial wherewithal to serve people of modest means for generations to come.”

You may find the document at: http://www.ncua.gov/letters/letters.html.