The federal credit union regulator Monday afternoon announced that of the money allocated for this year’s revolving loan fund activities, $4 million is designated for loans and $800,000 for grants so credit unions can help members, businesses, and communities facing economic hardships due to the coronavirus (COVID-19) pandemic.
The NCUA’s Office of Credit Union Resources and Expansion (CURE), the agency said, will award grants and loans to low-income credit unions to:
- Provide assistance to schools with children in need, including providing breakfast and lunch;
- Provide assistance to elderly members needing food and medication delivery services;
- Offer rental, mortgage, and utility payment assistance to members such as entrepreneurs, small business owners, and hospitality and service industry employees;
- Offer loan payment relief to affected members;
- Develop a new product or service for affected members, such as offering preloaded cards; or
- Cover costs associated with moving credit union operations to remote locations: laptops, software, and short-term rentals.
The loans and grants are provided by the Community Development Revolving Loan Fund (CDRLF), one of the NCUA’s four permanent funds. As reported earlier Monday, eligible credit unions may apply for the COVID-19 Emergency Response grants or loans now through May 22.
In today’s announcement, the NCUA said the COVID-19 emergency loans have a maximum award of $250,000 and will mature in three years. “There will be no interest rate applied to loans awarded under this initiative throughout the full term of the loan,” the agency said. All loans must be repaid to the NCUA regardless of how they are accounted for by the credit union, and the entire principal is due at maturity. There is no penalty for principal prepayment. Principal prepayments may be made as often as monthly.
COVID-19 grants, with a maximum award of $10,000, will be awarded on a rolling basis throughout the open application period. Minority depository institutions and credit unions with less than $100 million in assets will receive priority, the agency said. Awards will be made on a first-come, first-serve basis until the allocated funds are fully exhausted.
The NCUA says that credit unions with questions should contact CURE by email at CUREApps@ncua.gov.