Letter to CUs outlines NCUA’s updated methodology, options for incorporating military members into low-income designation process


A letter to credit unions Thursday outlines NCUA’s updated methodology and the new options credit unions have to incorporate their military members into the low-income designation process. NCUA stated that it will work with credit unions on an individual basis to determine what types of additional information would be most helpful in determining whether members qualify as low-income.

Earlier this month, NCUA announced that it is expanding its approach when considering military personnel in determining whether a credit union qualifies for the low-income designation.

There are several benefits for credit unions that carry low-income designations, including exemptions from the statutory cap on member business lending, eligibility for grants and loans from the Community Development Revolving Loan Fund, the ability to accept deposits from non-members and the authorization to obtain supplemental capital.

Thursday’s letter stated that, although its primary methodology may not always fully account for all military personnel served by a credit union, credit unions may use the flexibility provided in § 701.34(a)(3) of the NCUA regulations to submit additional information demonstrating they qualify for a low-income designation.

According to the letter, options include, but are not limited to, a credit union submitting the following information to CURE:

  • A list identifying members who are active-duty military personnel with no additional member-specific information necessary. The NCUA will factor these members into the low-income designation analysis similar to members with an APO or FPO mailing address.
  • Granular data for military members, including active-duty and members of the Reserve and the National Guard. Data could include actual income, paygrade, years of service, or rank of its military members.
  • The credit union can conduct and provide to the agency for evaluation any relevant analysis that demonstrates all or some portion of its military membership, including active-duty and members of the Reserve and the National Guard, qualify as low-income. To ensure efficiency whenever possible, the NCUA recommends discussing a proposed methodology with CURE before undertaking such an analysis.

NCUA’s full letter can be accessed by clicking here.

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