News from the NCUA:
Letter to Credit Unions (20-CU-15)
Principles for Making Responsible Small-Dollar Loans
In March 2020, the NCUA issued Letter to Credit Unions, 20-CU-04, Responsible Small-Dollar Lending in Response to COVID-19. That letter encouraged you to consider extending small-dollar loans to members experiencing economic hardship related to the COVID-19 pandemic, and discussed the Joint Statement Encouraging Responsible Small-Dollar Lending in Response to COVID-19 issued on March 26, 2020.
To provide additional guidance, on May 20, 2020, the NCUA and the federal banking agencies released Interagency Lending Principles for Offering Responsible Small-Dollar Loans. The general principles described in the statement apply to all credit unions that make small-dollar loans. Credit unions should underwrite small-dollar loans based on prudent policies, offer these products in a manner consistent with safe and sound practices, comply with consumer protection and other applicable laws and regulations, and treat members fairly. Effectively managing the credit, operational, and compliance risks associated with these loans is also an important undertaking for credit unions.
Reminder: Streamlined CDFI Application Round Ends May 31
Credit unions interested in using the National Credit Union Administration’s streamlined process for obtaining Community Development Financial Institution certification have until May 31 to apply.
The NCUA’s online program guide has all the necessary instructions for the qualification process.
To qualify, low-income-designated credit unions submit data on their loan originations to the NCUA by email to CURECDFI@ncua.gov using the NCUA’s secured email encryption system and complete an online participation form.
The Office of Credit Union Resources and Expansion then analyzes each credit union’s products, services, and other indicators to determine whether it qualifies to use the streamlined certification application. The NCUA will provide qualified credit unions with the necessary information to complete and submit the streamlined certification application to the Community Development Financial Institutions Fund, which will make a final certification decision.
To learn more, visit the NCUA-CDFI Certification Initiative webpage.« RETURN TO ALL NEWS