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Serving the Underserved
NCUA is primarily focused on ensuring the safety and soundness of
the credit union system. As an adjunct to that mission, the agency has developed
initiatives to facilitate credit unions more effectively serving their memberships,
especially those in underserved areas. The Federal Credit Union Act, governing this
agency and federally insured credit unions expects this national system to meet “…the credit and savings needs of consumers, especially persons
of modest means.”
Expanding Into Investment Areas
Any federal credit union with a multiple common bond field of membership may include
in their field of membership, without regard to location, communities satisfying
the definition for serving underserved areas. These communities must be located
within what is know as an “Investment Area” as defined in Section 103(16) of the
Community Development Banking and Financial Institutions (SDFI) Act of 1994.
Chapter 3, Part 3 of the NCUA Chartering Manual details the seven criteria’s
included in an Investment Area. For full details on expansion and investment areas,
click on the following link.
Where are the investment areas?
Use these instructions to find investment areas anywhere in the United States.
How do I apply for expansion into an investment area?
You will need to assemble an application package to be sent to NCUA. Use this
Sample Letter to NCUA (PDF)as a guide and include the map and worksheet
which you obtained by following the instructions in the previous section. You will
also need to include a business plan in your application. This
Guideline for a Business Plan (PDF) will help you create a plan. If you
need further assistance, contact
your NCUA regional office, department of Insurance.
Identifying Investment Areas
View recent
Underserved Areas Reports here
Low Income Designation
Finding ways to supply quality financial services to people in need is no small
task. For a credit union to benefit from programs available from NCUA to financial
institutions that serve the underserved, it must acquire a “low income designation”
status.
A low-income designated credit union is defined in Section 701.34 of the NCUA Rules and
Regulations. Credit Unions seeking the designation should become familiar
with Chapter
3, Parts 1& 2 of the NCUA Chartering Manual. If you need further assistance,
contact your NCUA regional office, department of Insurance.
Empowerment Zones
The Empowerment Zone and Enterprise Community (EZ/EC) initiative is a key element
of the government’s job creation strategy for America. Its purpose is to create
jobs and business opportunities in the most economically distressed areas of inner
cities and the rural heartlands.
The program is designed to provide tax incentives and performance grants and loans
to create jobs and expand business opportunities. It also focuses on activities
to support people looking for work, job training, childcare and transportation.
This initiative is different from other similar efforts because the community itself
determines through written or quantifiable goals how the money will be spent and
what the results of the activity will be.
The areas designated as Enterprise Communities and Empowerment Zones are listed
on the Department
of Housing and Urban Development’s website.