The National Credit Union Administration recently announced that it awarded more than $500,000 in grants to 127 lower-income credit unions in the hopes of allowing them to expand their product offerings.
In its release, the NCUA indicated that, in addition to being able to expand service such as mortgage and credit availability, the grants were awarded so that the institutions might be able to more efficiently train new generations of credit union leadership and gain greater access to the resources that help them serve their respective communities. In all, the 127 lower-income entities received assistance through the Community Development Revolving Loan Fund, administered by the NCUA's Office of Small Credit Union Initiatives. The fund was established by Congress in 2001 in an effort to provide low-income communities a wider range of opportunities, and has received more than $12.8 million in grant funding to date.
"At NCUA, we work each day to help low-income credit unions better serve their members and communities," said Debbie Matz, NCUA board chairman. "The credit unions that receive these grants will be able to offer more services to members, more resources to their communities and more education for young people interested in financial services careers."
Keeping up with technological changes
A key component of the NCUA's new grant program is the CDFI initiative, for which a total of $100,000 was awarded across 40 credit unions. The majority of grants were made in the interest of new products for mobile services, yet another indication of the shifting manner by which credit unions conduct their business.
"The new CDFI initiative, which provides grants to help credit unions obtain certification, is important because certified credit unions may apply for funding from the U.S. Treasury Community Development Financial Institutions Fund," said William Myers, director of the Office of Small Credit Union Initiatives. "That funding provides support to institutions like credit unions that serve low-income people and communities that lack adequate access to affordable financial products and services."
Myers also noted that 54 student internships were funded by the grants, offering opportunities for students who are interested in pursuing careers in financial services. More immediately, though, any assistance provided to smaller financial institutions is welcome, given the amount of regulation that has been applied uniformly. Credit unions, regardless of member size or compliance capabilities, are subject to the same standards for servicing and loan approval as their larger banks, so helping level the playing field is a primary goal of the NCUA.