Grants Give Low-income Credit Unions the Means to Grow

Each year, NCUA, through the Community Development Revolving Loan Fund, provides eligible low-income credit unions with grants to help them expand their products and services, utilize new technology and bring new ideas and fresh perspectives to their operations through additional training and student internships.

In 2016, the grant initiatives and maximum grant awards are:

  • Capacity and growth: Credit unions considering new lending programs, deposit products or other growth strategies to increase members' financial service opportunities may apply for up to $15,000 in assistance.
  • Cyber security: Up to $7,000 will be available for each eligible credit union to enhance cyber security and protect member information.
  • Staff training: Grants of up to $3,000 will be available for selected credit unions to pay for training related to credit union operations, including compliance, lending and collections.
  • Student internships: Up to $4,000 will be available to each credit union to hire students enrolled in high school or college.

"These grants are important investments in credit unions, their members and their communities," Martha Ninichuk, acting director of NCUA's Office of Small Credit Union Initiatives said. "They can provide credit unions the opportunity to grow and better serve their members. I encourage all low-income credit unions to consider applying."

A great example of how these grants can make a real difference comes from Michelle Lacombe, one of NCUA's economic development specialists who works with credit unions in Mississippi and Louisiana. She worked with a small credit union, just over $11 million in assets and fewer than 2,000 members, to secure a grant to hire a student intern.

"Like a lot of credit unions, this credit union suffered years of negative earnings, but had turned the situation around, thanks in part to a dedicated staff and a board of directors committed to the success and longevity of the credit union," said Lacombe. "As I worked with them, it became clear the credit union needed marketing assistance to bring in new members. Loan volume was declining because an aging membership had reduced borrowing needs. If the credit union was to remain healthy, it needed to attract new members and find new lending opportunities."

Fortunately, as Lacombe found, the credit union had a number of advantages. The branch building was easily accessible off an interstate with plenty of parking, a drive through and reasonable hours of operation. The credit union also had a large number of select employee groups eligible for membership. The problem was reaching them.

"It came down to capacity," Lacombe noted. "With two full-time staff members handling the day-to-day operations, they didn't have the manpower or the time to devote to outreach and marketing. The solution was a student intern majoring in marketing at a local university, who could bring fresh ideas and skillsets to the credit union and do the work necessary to reach out to potential members."

In partnership with the credit union's management, Lacombe worked with the intern to develop an action plan that included:

  • Updating the contact information and listings for the credit union's select employee groups;
  • Analyzing the credit union's members from each employee group and how they were using the credit union's products and services;
  • Surveying existing members of select employee groups to identify their likes and dislikes concerning the credit union's products, services and operations;
  • Reviewing the credit union's website to make sure it was up-to-date and the content was relevant to current and potential members; and
  • Updating the credit union's brochures.

Completing these projects had an enormous benefit for the credit union. The intern found that many of the businesses and groups eligible for membership hadn't been contacted in a while and appreciated the outreach. The credit union also had a key addition, even if temporary—an extra person to reach out to each select employee group to tell the credit union's story and find new members.

"It's clear having a student intern made a difference for this credit union," said Lacombe. "The limited staff couldn't have accomplished this without these grant funds due to the credit union's size. I consider this an incredible success on every level."

NCUA will accept grant applications between June 1 and June 30. Interested credit unions may apply using NCUA's CyberGrants program. An eligible credit union may apply for more than one initiative under a single application; however, awards are subject to the availability of funds.

A full list of eligible grant projects and NCUA's evaluation criteria can be found at http://go.usa.gov/cJ8TJ. To apply, go to http://bit.ly/1by4t2v.