Effective Tuesday, the NCUA will accept 2012 grant and loan applications for the Community Development Revolving Loan Fund, available to 1,110 low-income designation credit unions.
The NCUA also posted a new YouTube video about the Community Development Revolving Loan Fund application process.
“This year, we are making $1.3 million available for grants and $11 million for lending, said NCUA Board Chairman Debbie Matz. “To help more credit unions access these funds, we have created a new video that highlights how the program works and the new, streamlined application process.”
“All of NCUA’s work to improve our grant and loan programs reflects the agency’s strong commitment to help low-income credit unions thrive,” said Matz, who is featured in the new video. “Low-income credit unions are extremely important to their communities. They fill a crucial role by providing needed access to financial products and services for individuals of modest means. These grants and loans are designed to provide vital assistance to low-income credit unions so they will be available to serve their members for many years to come.”
NCUA’s Office of Small Credit Union Initiatives administers the CDRLF and the grant application process. Grants are available for as much as $25,000 with an application deadline of June 29. In 2012, credit unions will experience a streamlined CDRLF application program. Specific changes include:
- An automated, online funding application;
- A single application for all funding initiatives; and
- The ability to bundle reimbursement requests for multiple initiatives.
As part of the 2012 CDRLF funding round, NCUA has prioritized grants for:
- Financial literacy and education in school branches;
- New product and service development;
- Staff, official, and board member training;
- Student and job creation internships; and
- Volunteer Income Tax Assistance.
Previously, the CDRLF provided loans up to $300,000, but a new rule adopted by the NCUA Board last year now allows loans to exceed that amount on a case-by-case basis.
The modified rule also allows greater flexibility in setting interest rates that can fall below 1%. For 2012, NCUA has set the interest rate for loans at a record low of 0.4%. NCUA will accept loan applications through the rest of 2012 or when funds are exhausted.
Low-income credit unions may use low-rate CDRLF loans for projects that include expanding share draft or credit card programs; creating partnerships with community-based service organizations and government agencies; acquiring, expanding, or improving office space or equipment; initiating or expanding micro-business, education, and real-estate loan programs; and offering consumer-friendly, short-term alternatives to payday loans.
“The changes we have put in place to ease credit unions’ access to the Community Development Revolving Loan Fund build on NCUA’s past success in assisting low-income credit unions to better serve their members,” Matz said. “I encourage all eligible credit unions to apply for this important source of money.”