NCUA's recent guidance to examiners about how to treat low income and community development credit unions is a good place to start but will need good implementation as well.
The National Federation of Community Development Credit Unions praised the NCUA for the guidance that the agency made public on Jan. 15, for having listened to many concerns from low income and CDCUs, but said they would be looking closely for evidence that examiners are taking the guidance to heart.
According to National Federation CEO Clifford Rosenthal, the agency's previous guidance in this area, a white paper distributed as a letter to credit unions in 2005, did not have the impact it could have had because too few examiners knew about it or were trained on it.
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The new guidance recognizes, for example, that CDCUs and LICUs often have to use non-traditional loan underwriting when serving their lower income members.
"NCUA is very aware of the distinct qualities inherent in credit unions that primarily serve consumers in low and moderate-income areas," commented NCUA Chairman Debbie Matz when releasing the guidance. This is a reasoned, flexible and sensible regulatory approach, and it can have a real and positive impact in distressed communities."
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