Low Income Designation Credit Unions Embrace ‘Serving the Underserved’
by Cyndi Cohen
Credit unions are committed to “serving the underserved” in some capacity. However, a number of credit unions, with the help of the National Credit Union Association (NCUA), are increasingly developing initiatives to more effectively serve those members in underserved areas by officially becoming Low Income Designation (LID) Credit Unions.
According to the NCUA, LID is a classification for credit unions that meet certain membership criteria entitling these credit unions to legislated benefits. A federal credit union qualifies for LID when a majority of its membership (50% + one member) qualifies as Low-Income Members, or having a family income 80% or less than the median family income for the metropolitan area where they live or national metropolitan area, whichever is greater.
William Myers, Director of the Office of Small Credit Union Initiatives (OSCUI), explains that LID credit unions have access to benefits unavailable to non-LID credit unions. “These benefits are designed to help the credit unions serve members recognized to have challenges accessing mainstream financial products and services.”
The primary benefits eligible to LID Credit Unions include:
- Accept non-member deposits from any source
- Offer secondary capital accounts
- Receive exemption from the aggregate loan limit for member business loans (MBLs)
- Apply for grants and low-interest loans from NCUA
And additional benefits include:
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