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NCUA Changes Low-Income Designation to Include Military Personnel in Calculation

May 2020
NCUA Changes Low-Income Designation to Include Military Personnel in Calculation

ALEXANDRIA, Va. (May 7, 2020) – The National Credit Union Administration is expanding its approach when considering military personnel in determining whether a credit union qualifies for the low-income designation, the agency announced today.

“At the NCUA, we’re always looking for ways to foster greater financial inclusion, accessibility, and opportunity for all Americans, which I consider to be the civil rights issue of our time,” NCUA Chairman Rodney E. Hood said. “This is a great step in being more inclusive when it comes to the members of the military. Because so many military members are just getting started, they may not have much experience in working with financial institutions, at least not yet. Currently, the NCUA encourages higher education by counting students in our methodology, and under my direction, the agency has determined we can encourage military service in a similar way.”

To qualify as a low-income credit union, a majority of the credit union’s membership must meet certain low-income thresholds, based on data from the Census Bureau and requirements outlined in the NCUA’s Rules and Regulations.

Under the new approach, military personnel will now be considered in a similar manner as students attending colleges, universities, vocational or technical schools when the NCUA evaluates a federally insured credit union’s low-income designation.

Active-duty military personnel constitute a highly mobile population with frequent transfers, both domestically and internationally, and often list Army/Air Post Office or Fleet Post Office mailing addresses. Prior to the change in the designation’s methodology, the NCUA’s income assessment tool only geocoded the incomes of members with physical street addresses. As a result, service members using APO or FPO addresses were omitted from the agency’s evaluation.

The agency’s announcement comes as the country recognizes the contributions and sacrifices of service members during National Military Appreciation Month.

There are several benefits for credit unions that carry a low-income designation including an exemption from the statutory cap on member business lending, eligibility for grants and loans from the Community Development Revolving Loan Fund, the ability to accept deposits from non-members, and the authorization to obtain supplemental capital.

Additional information about the updated methodology and the new options credit unions now have to incorporate their military members into the low-income designation process will be detailed in an upcoming Letter to Credit Unions.

Credit unions should contact the NCUA’s Office of Credit Union Resources and Expansion at or 703.518.1150 for additional information about the low-income designation.

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