NCUA Board Member Championed Modifying Low-Income Credit Union Definition
ALEXANDRIA, Va. (May 7, 2020) – NCUA Board Member Todd M. Harper applauded the agency’s decision to count qualified service members who live on military bases at home and abroad when designating a low-income credit union.
“Our country is in an economic war against COVID-19, and the NCUA needs to do all that it can to help federally insured credit unions serve their members, including our troops, during these difficult times,” Harper said. “This decision will allow more credit unions that serve the military to qualify for designation as a low-income credit union and open the door to more resources.”
There are several benefits for credit unions with a low-income designation, including an exemption from the statutory cap on member business lending, eligibility for grants and low-interest loans from the Community Development Revolving Loan Fund, the ability to accept deposits from non-members and obtain supplemental capital, and consulting assistance.
Harper has championed this issue of low-income credit unions serving the troops since joining the NCUA Board. At the May 2019 NCUA Board meeting, he was the first Board Member to ask staff to identify solutions to the issue of accounting for the individuals who have lower incomes and who live on military bases. Harper has since spoken repeatedly about the issue.
Low-income designated credit unions play a critical role in providing affordable financial services. At the end of 2019, there were 2,605 low income credit unions with 56.3 million members and $661.6 billion in assets. To qualify as a low-income designated credit union, the majority of a credit union’s membership must meet certain low-income thresholds based on data available from the American Community Survey done by the U.S. Census Bureau.
“Ultimately, today’s action advances economic dignity and inclusion by counting everyone when determining whether a credit union meets the low-income designation,” Harper concluded. “I’m very grateful for the efforts of the NCUA staff who worked diligently and creatively to fix this problem and to the leaders of the Northwest Credit Union Association and the Defense Credit Union Council who alerted me about the need to act.”