Credit union regulator to strive for 15 underserved area expansions in 2024

It's one of 2 strategic objectives focused on access to credit union service

Will the coming year bring more credit union expansion into underserved areas? Maybe, if credit unions’ federal regulator succeeds in satisfying a particular performance indicator it set for itself for 2024.

The National Credit Union Administration (NCUA) Board last week approved a 2024 annual performance plan that sets out performance measures and targets in support of the goals in the agency’s strategic plan. One of the agency’s strategic objectives this year, according to the board-approved plan, is to enhance consumer access to affordable, fair, and federally insured financial products and services.

NCUA Board Member Tanya Otsuka, in her statement for last week’s board meeting, pointed to a “new metric” created under the plan to measure the agency’s progress toward that objective, and that is to approve at least 15 underserved area expansions, “in accordance with regulation and agency policy, that have intended offices or service facilities located no more than 25 miles from any point within the area, or have offices or service facilities reasonably accessible to low-income individuals, and that increase consumer access to affordable financial products.”

Otsuka said such expansions “can be a tool to increase credit unions’ opportunity to help underserved communities, but it’s important that they include meaningful access through convenient offices and branches and lower priced financial products and services.”

The plan shows the agency also seeks to support and foster small, minority, low-income, and new credit unions. Noting it “will continue to evaluate ways to further streamline its chartering process for new credit unions …,” the plan also states that the NCUA will support and foster small, minority, low-income, and new credit unions through the following strategies and initiatives:

  • Encourage greater use of the NCUA CDRLF [Community Development Revolving Loan Fund] and the U.S. Treasury’s Community Development Financial Institution certification to bolster services to low-income members.
  • Enhance education and outreach services to credit union boards and management, including through online training courses.
  • Provide educational assistance and support to groups and communities seeking to form credit unions, including ongoing and regular updates to the chartering guide based on input received from users.
  • Seek feedback from newly chartered credit unions and groups supporting them to identify ways to streamline the credit union chartering process while maintaining safety and soundness and consumer protection priorities.
  • Structure the CDRLF grant initiatives to maximize the impact on low-income communities.
  • Promote the agency’s CDRLF loan program which provides low-cost funds to help low-income designated and MDI [minority depository institution] credit unions meet the evolving needs of their members and communities.
  • Follow-up with federal credit unions on implementation of their business and marketing plans every year for the first three years after receiving a new or expanded community charter.
  • Develop an MDI awareness initiative, to promote the growth of existing, and encourage the identification of new, MDI credit unions.

NCUA third-quarter data for 2023 show there were 493 MDI credit unions during that period, with 5.3 million members and $66.4 billion in assets. Also as of third quarter 2023:

  • The number of low-income-designated credit unions declined by 46 from the same time the year before – from 2,621 to 2,575 – though their share increased from 54% of all federally insured credit unions to 55%. Low-income-designated credit unions had 73.5 million members and $1.12 trillion in assets, the data show.
  • “Small” credit unions – labeled as those with less than $100 million in assets – numbered 2,877, had 7.8 million members, and held an aggregate $84.8 billion in assets, according to the agency.

NCUA 2024 Annual Performance Plan

Otsuka statement