SAN JUAN, Puerto Rico—Calling the Community Development Revolving Loan Fund one of NCUA’s “most impactful initiatives,” agency Chairman Todd Harper told attendees at Inclusiv’s Annual Conference here NCUA hopes to expand the program.
“The grants the NCUA makes through the Revolving Loan Fund make a real difference. These investments go into communities that would otherwise have unmet needs, giving credit unions additional resources to build their capacity and create more secure financial futures for their members,” Harper said during the meeting. “During 2021 alone, the NCUA awarded CDRLF grants to more than one hundred low-income designated credit unions including: 22 grants totaling more than $1 million for expanding credit union outreach to underserved communities and improving their members’ financial well-being.”
For this year’s cycle, Harper said NCUA will award more than $1.5 million in grants for small credit union mentoring and training and leadership development, in addition to underserved outreach and digital services. The 2022 grant round is now open and eligible low-income-designated credit unions can apply through June 24.
“We encourage all eligible credit unions to apply, and we are hopeful that we will be able to grow this program in 2023,” stated Harper. “The president’s budget to Congress requested $4 million for the Revolving Loan Fund in the year ahead. That amount would more than double the amount available within the NCUA to support the fund. And, with more funding the NCUA would be able to offer more grants, provide larger grants, and find more ways in assisting low-income credit unions to fulfill their missions.”
Additional Resources
Harper added that the Emergency Capital Investment Program and Subordinated Debt are also other resources for CUs.
“NCUA has strongly encouraged eligible credit unions to apply for the Emergency Capital Investment Program, or ECIP for short, because these institutions are uniquely positioned to serve the communities the ECIP was created to help,” said Harper. “The ECIP aligns closely with credit unions’ mission to expand access to affordable financial services, free of discrimination, to those of modest means.”
In December 2021 the Treasury Department provided 85 credit unions with ECIP funding, with individual allocations ranging from less than $1 million to more than $200 million.
“The NCUA board finalized a rule in December 2021 that permitted ECIP issuances to be considered Grandfathered Secondary Capital, irrespective of the date of the actual issuance. That final rule became effective on Jan. 1, 2022,” noted Harper. “To further support this historic effort, the NCUA issued a Supervisory Letter in October 2021 permitting low-income-designated credit unions to issue 30-year notes under the ECIP. Later this year the NCUA board will consider a proposed rule to permit ECIP funding to count as regulatory capital for the entire time it is held by eligible institutions.”
‘None Too Soon’
Harper explained that the relief NCUA has provided MDIs during the last two years came “none too soon.”
“The pandemic has accelerated shifts in the way credit unions conduct business, with more members moving to digital platforms and mobile apps to conduct transactions,” he pointed out. “The pandemic also further exposed the extent of the disparities in wealth and economic opportunity for communities of color, underserved areas, and rural communities. That is why the NCUA has sought to improve its support of MDI, low-income and community development credit unions over these last 26 months.
“In doing so, we are remaining true to Roberto Clemente’s motto,” Harper continued. “To quote the words of this Puerto Rican baseball legend, ‘If you have a chance to help others and fail to do so, you are wasting your time on this earth.’”