The NCUA on Tuesday reminded credit unions about a recent federal interagency statement reminding creditors of the ability under the Equal Credit Opportunity Act and Regulation B to establish special purpose credit programs, or SPCPs, to meet the credit needs of specified classes of people. SPCPs are credit assistance programs for economically or socially disadvantaged consumers and commercial enterprises.
According to the NCUA letter to credit unions, the statement explains that ECOA and Regulation B permit creditors to extend special purpose credit offered pursuant to:
- any credit assistance program expressly authorized by federal or state law for the benefit of an economically disadvantaged class of persons;
- any credit assistance program offered by a not-for-profit organization for the benefit of its members or an economically disadvantaged class of persons; or
- any special purpose credit program offered by a for-profit organization, or in which such an organization participates to meet special social needs, if it meets certain standards prescribed in regulations by the CFPB.
Credit unions, as not-for-profit organizations, fall under the second category, although some programs that credit unions participate in may also fall under the first. Credit unions may consider the use of SPCPs across all types of credit covered by ECOA and Regulation B, and credit unions can also use an SPCP to offer, for example, special underwriting or pricing for designated loan products, according to the NCUA.