Low-Income Credit Union Designation

A credit union that meets certain standards for serving low-income members is eligible for designation as a “low-income credit union.” That designation carries benefits to help the credit union build its capacity and better-serve its community.

About half of all federally insured credit unions have the low-income designation, and the NCUA considers supporting those credit unions to grow and thrive as central to the mission of the credit union system.

How Does a Credit Union Qualify for the Low-Income Designation?

Per the NCUA’s regulations, a credit union may be designated low-income if more than 50 percent of its members have a family income of 80 percent or less than the median family income for the metropolitan area where they live or national metropolitan area, whichever is greater, or those members who earn 80 percent or less than the total median earnings for individuals for the metropolitan area where they live or national metropolitan area, whichever is greater.

All federally insured credit unions that meet the eligibility criteria can receive the low-income designation. However, some state-chartered credit unions may not be afforded all the designation’s benefits. State-chartered credit unions should contact their state supervisory authorities to determine their low-income designation criteria, status, and benefits.

What Are the Benefits of the Designation?

The low-income designation offers a credit union:

• An exception from the statutory cap on member business lending, which expands access to capital for small businesses and helps credit unions to diversity portfolios;
• Eligibility for grants and low-interest loans from the Community Development Revolving Loan Fund;
• Ability to accept non-member deposits from any source; and
• Authority to obtain supplemental capital.

How Can a Credit Union Determine if Its Membership or Areas of Service Qualify as Low-Income?

The NCUA uses member data obtained through examinations to determine if a credit union qualifies for the low-income designation and notifies those credit unions of their eligibility.

Federal credit unions that do not receive notification, but believe they qualify for the designation, may submit their member data file to the NCUA directly. Staff from the Office of Credit Union Resources and Expansion will work with credit unions to determine if there are other ways for them to get to a low-income designation.

For assistance in determining whether your credit union qualifies for a low-income designation or to discuss how your credit union can qualify, please contact the NCUA’s Office of Credit Union Resources and Expansion at DCAMail@ncua.gov or 703.518.1150.

Where Can I Find More Information About the Low-Income Designation and Serving Low-Income Areas?

The NCUA has several online resources available with information about the low-income credit union designation and related topics.

The agency developed a Low-Income-Designated Area Workbook that uses the current-year American Community Survey data to determine which geographic areas are classified as low-income. The workbook lists the counties, census tracts, and census block groups within the United States and Puerto Rico. If a member resides within any of the listed geographic areas, that member is counted as low-income. The NCUA designates a federally insured credit union as low-income when more than 50 percent of the credit union’s members reside in a low-income area.

The workbook was created to assist credit unions in identifying low-income populations and to increase their outreach efforts to those communities. It is not designed to qualify a credit union for the low-income designation.

Credit unions also can review frequently asked questions about the Low-Income-Designated Area Workbook.

Additionally, credit unions can visit the NCUA’s Learning Management Service for educational materials on serving low-income communities, the underserved, and new or emerging markets. Access to the LMS requires creating an account.

More information on serving the underserved can be found on the NCUA’s Serving the Underserved webpage.