NCUA, Treasury Agree to Modify CDCI “Viability” Standards for CDCUs

NCUA, Treasury Agree to Modify CDCI “Viability” Standards for CDCUs

Contact: Rafael O. Morales, Public Affairs Officer ● 212-809-1850, ext. 206 ●

(April 14, 2010 – New York, NY) Responding to a request by the National Federation of Community Development
Credit Unions (Federation), the National Credit Union Administration (NCUA) and the U.S. Department of the
Treasury have agreed to modify viability standards for credit unions applying to the Community Development
Capital Initiative (CDCI).

According to a letter from Tawana James, Director of NCUA’s Office of Small Credit Union Initiatives, “NCUA
has adjusted its evaluation criteria with respect to non performing loans… [and the] new formula will give greater
weight to LICU’s cushion against delinquencies even in worst-case scenarios… Preliminary review of the latest
data indicates that by using NCUA’s new formula, additional LICUs will qualify for CDCI without matching
funds,” her letter read.

NCUA’s complete “viability” letter to the Federation is available online at:

“We are very gratified that NCUA and Treasury have recognized the distinct operating characteristics of credit
unions serving low-income communities,” explained Federation President/CEO Cliff Rosenthal. “We hope these new standards will indeed make it possible for many more credit unions to apply by the April 30 deadline.”

In addition to these changes to CDCI viability standards, the Federation also scored major victories advocating for
Treasury and NCUA to push back program deadlines in order to allow for maximum participation by credit
unions. Based on the recently amended deadlines, credit unions have until April 30 to apply for CDCI funds and
CDFI certification from Treasury, and until May 10 to submit CDCI-required Secondary Capital Plans to NCUA.

“We truly appreciate both Treasury’s and NCUA’s flexibility in addressing the needs of credit unions applying to
this program,” said Rosenthal. “These funds were made available precisely because the eligible institutions are
operating in some of America’s most distressed communities, and the more of them that are able to participate, the greater the impact will be on the people they serve.”

About the Community Development Capital Initiative

Announced in February by Treasury Secretary Timothy Geithner, CDCI is a program through which low-income
credit unions (LICUs) certified as Community Development Financial Institutions (CDFIs) can obtain up to 3.5% of their assets as secondary capital, which counts toward their regulatory net worth. Eligibility for the
CDCI program is determined by NCUA in conjunction with Treasury. Highly rated credit unions that are well capitalized qualify readily, in the absence of material negative trends. Credit unions that fall below that standard
may still qualify for funds if they are able to obtain matching secondary capital from non-governmental sources.

In addition to extensive outreach with NCUA and Treasury officials on CDCI program parameters, the Federation
recently announced that it is committing $1 million in secondary capital to serve as match for member CDCUs to receive Treasury Funds.

Pablo DeFilippi, Associate Director of Membership Development, stressed that “the Federation is committed to helping CDCUs apply for CDCI funds by providing technical assistance to members on all aspects of the program and its various applications. We are also offering extensive consulting services to other credit unions interested in applying,” he added. Credit unions seeking assistance should contact Pablo DeFilippi at: or 800-437-8711 x304.

More information about the CDCI program is available on the Federation’s website at:

The National Federation of Community Development Credit Unions (Federation) is a certified CDFI Intermediary representing more than 200 community development credit unions (CDCUs). The Federation’s member CDCUs provide credit, savings, transaction services and financial education to more than 1 million residents of low-income urban and rural communities across the United States. The Federation also represents 50 Community Development Partners, some of the nation’s largest credit unions with a special commitment to serving low-income communities. Founded in 1974, the Federation is headquartered in Lower Manhattan with offices in Colorado Springs, CO; Madison, WI; San Francisco, CA; and Washington, DC. The Federation offers a wide range of advocacy, educational, training, investment, marketing, and outreach programs to support and assist CDCUs. For more information about the Federation and its programs, please visit:

© 2010 National Federation of Community Development Credit Unions.

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