ALEXANDRIA, Va. (5/2/13)--As the number of low-income designated credit unions (LICUs) increases, the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) is working to inform these new LICUs of the benefits of their new status, including their new-found access to secondary capital.
The LICU designation brings benefits that include the ability to accept supplemental capital and an exemption from the member business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.
OSCUI said it would provide details on secondary capital benefits in the next three installments of the monthly FOCUS
e-Newsletter. This month, the agency outlined general secondary capital information, including:
- Borrowing limitations for federal credit unions;
- NCUA ''Secondary Capital Plan'' approval;
- Secondary capital account contract agreements; and
- Capitalization requirements.
Future secondary capital columns will address proper accounting treatment and prompt corrective action considerations, OSCUI said.
The NCUA in August notified 1,003 credit unions of their eligibility for the LICU designation. Those credit unions were offered a streamlined LICU application process, and many accepted the NCUA designation.
The agency and the National Association of State Credit Union Supervisors have also announced joint efforts to streamline the process for state-chartered credit unions to determine if they are eligible for a LICU designation. (Use the resource link to read April 22 News Now
story: NCUA Letters Address LICU, Corporate Credit Risk Issues)
There are currently 1,927 LICUs, according to the NCUA.
For this month's FOCUS
, use the resource link.