The Independent Community Bankers of America (ICBA) has requested an investigation from NCUA’s Inspector General on the agency’s decision to change the methodology used to determine whether a credit union qualifies for the low-income designation by fully considering military personnel. NCUA Chairman Rodney Hood announced the change in early May.
“NCUA’s decision will allow more credit unions to leverage the LICU designation, expanding access to safe and affordable financial products for American servicemembers,” said CUNA President/CEO Jim Nussle. “It’s incredibly disheartening that bankers would try to prevent our brave men and women in uniform from accessing the services of low-income credit unions.”
The LICU designation is granted when low-income members comprise more than 50% of a federal credit union’s membership. It entitles the credit union to certain statutory benefits, including being able to accept non-member deposits from any source, offering secondary capital accounts, member business lending exemptions and the ability to apply for grants and low-interest loans from NCUA.
CUNA, Leagues and policymakers, including NCUA Board Member Todd Harper, have supported the change for several years, with Nussle noting in a letter to Hood that such an action was especially appropriate during the ongoing pandemic.
This is the latest effort by banking trade organizations to degrade servicemembers’ financial well-being by complicating their access to credit union services. In 2019, ICBA and ABA were behind an effort to open military bases to profit-driven banks and abusive payday lenders, impairing troops’ relationship with their credit union.