Credit unions could borrow more money, won’t necessarily have to put up matching funds and won’t have to submit a community needs plan, according to new rules for the Community Development Revolving Loan Fund that the NCUA Board approved on Thursday.
The changes allow credit unions to possibly borrow more than the previous limit of $300,000. The regulation notes that the maximum will probably stay at $300,000 but “may exceed this amount in certain circumstances.’’
Credit unions won’t necessarily have to put up matching funds, as is currently required, but the agency may require funds depending on the credit union’s financial condition. Any matching funds couldn’t come from government sources because the agency doesn’t want to encourage “overdependence” on government funds, according to an explanatory note accompanying the regulation.
The new rule eliminates the requirements that credit unions applying to the fund have to provide a Community Needs Plan and make financial projections.
Instead, credit unions have to provide to provide a narrative describing how they will use the money and how it will support the community’s economic development.
While financial projections aren’t required, the agency reserves the right to require them on a case-by-case basis, it said.
The rule also requires that non-federally insured credit unions must agree to be examined by the NCUA if they want to apply for the funds. The new rule is available online.