Executives incorporating their low-income designation into theirbusiness plans said it has brought both greater opportunities anddeeper community involvement.

More than 2,000 credit unions have now been designated as lowincome after the NCUA proactively identified them and offered asimplified application process.

In order to qualify as a low income credit union, at least 50%plus one of a federally chartered credit union's members had tohave incomes of not more than 80% of the median household incomefor their area. State-chartered credit unions face differentcriteria depending upon their state, but many of them have alsobeen recognized as low income.

But while many of the credit unions understood the legal andfinancial opportunities the low-income designation presented,(LICUs enjoy additional latitude with regulatory and capitalissues, for example) they didn't always expect the opportunity itbrought to both broaden and deepen relationships.

“I tend to think about this in terms of evolution, notrevolution,” said Pablo DeFilippi, membership director for theNational Federation of Community Development Credit Unions.

“There used to be a large perceived gap between CDCUs and other,so-called mainstream credit unions,” he continued, “but I don'tthink that exists as much anymore. All credit unions are startingto recognize they have low-income people among their members, andthey need to reach out to them, but they are doing so slowly and ina measured way.”

For example, DeFilippi said, many credit unions seeking tointegrate a designation into their operations will often begin bysurveying the community development and low-income services theyalready offer.

He noted many credit unions already offer a financial educationor financial counseling class or program, or they cash checks orrefinance very high interest rate loans, or make other efforts.They might have done this for years, DeFilippi said, but just notrecognized the work for what it was.

The federation offers an Emerging Market Review that can help acredit union conduct such surveys. During an EMR, a small team fromthe federation visits a credit union to identify what it alreadydoes and the opportunities that exist to do more.

“We called it the Emerging Market Review because there is agrowing awareness that serving low-income members is not justsomething a credit union does for charitable reasons,” DeFilippistressed. “Credit unions are discovering that serving low-incomemembers is an opportunity to grow, to increase their loanportfolios, broaden their membership and earn more fee income. It'snot optional, it's essential.”

Suncoast Schools, the nation's largest low-income credit union,has been going through the process of integrating its newdesignation into its operations, according to Julie Renderos, CFOat the $5.7 billion credit union in Tampa, Fla.

Renderos put Suncoast's application for a low-income designationinto the context of its 2013 shift from a federal to a statecharter as well as building on the recognition that the communitiesit serves had also begun to change.

“We started out as a federally chartered credit union servingprimarily teachers,” Renderoos observed, “but then came tounderstand that the federal charter didn't work as well it had forus, that many of our communities had really shifted.”

Renderos credited the Great Recession and the credit union'slocation in one of the hardest-hit states.

“You know, here we were in one of the 'sand states',” she said,“and we had so many members who needed our help just to stay intheir homes. We started a loan modification program on our ownbefore anything else was announced.”

Suncoast did other things to help see its members through thecrisis, and as the crisis ended Renderos said Suncoast was leftacutely aware it needed to keep serving lower-income members.

“It was clear our communities have low-income people in them andthat we need make sure our products and services meet their needsand can help them onto their next steps,” Renderos said, addingthat Suncoast was in the process of applying for CDFIrecognition.

For the $1.1 billion CoVantage Credit Union in Antigo, Wis.,integrating working with low-income members into operations hasbeen a matter of becoming aware of communities that need the creditunion's help.

Paul Grinde, community development officer for the credit union,said some of the awareness CoVantage needed dated back to when thecredit union was founded in 1952, but that the institution hadcontinued working to hone and refine it.

Grinde said working with low-income members has often been amatter of building of awareness of members' needs, such asaccepting taxpayer identification numbers as well as SocialSecurity numbers for some its procedures and applications.

Likewise, when CoVantage became aware that increasing numbers ofHmong had moved into the community to join relatives who had beensettled there after the Vietnam War, the credit union hired someHmong as staffers in branches near their neighborhoods.

Jamie Chase, founder of CU Strategic Planning, a consultancyspecializing in helping credit unions earn CDFI recognition,explained credit unions had begun to realize that working withlow-income members opened up a path to growth.

For example, if the credit union's loan growth is negative orthe yield on loans is below peers, the new low-income designationcan provide insight into a potential opportunity to create productsand policies to increase loans to those members.

“Credit unions leveraging awareness of their service to alow-income field of membership have the highest yield on loans,loan growth, loan-to-share ratios and ROA in the nation,” Chasewrote. “As a result, the low income-designated credit union canincrease assets and grow the credit union without a catastrophicdrop in net worth.

“Most of these credit unions haven't realized that they servedlow income people,” Chase wrote in an email exchange with CUTimes. “The label is loaded. It conjures an image of a lazy orunemployed individual, or even a homeless person. In reality, 80%of the median family income nationally is $51,520. These arehard-working people: School teachers, city workers, college adjunctfaculty and every single enlisted man and woman in America. Theseare America's heroes,” she wrote.