Office of Small Credit Union Initiatives Report
BUILDING WEALTH AND DEPOSITS:
AN OPPORTUNITY FOR CREDIT UNIONS
Is your credit union seeking a way to introduce wealth-building
strategies to its members? If so, consider the Assets for
Independence (AFI) Program. The AFI Program promotes an
asset-based approach to help lift low-income families out of
poverty. It does this by encouraging them to save earned income
in accounts called Individual Development Accounts (IDAs).
An IDA is a matched savings account at a depository institution.
Under the AFI Program, administered by the U.S. Department
of Health and Human Services (HHS), each dollar deposited
into an IDA by the account holder is matched from $1 to $8 in
federal and nonfederal funds. The account holder may use the
combined savings and match to achieve any of three objectives:
acquiring a first home; capitalizing a small business; or enrolling
in postsecondary education or training. The goal is that the
account holder acquiring such economic assets will lead to their
long-term financial stability.
For credit unions designated as low-income or Community
Development Financial Institutions (CDFIs), offering IDAs
provides the potential to attract members for the long haul.
Initially, the new account holders increase credit union
membership. Later, they may become borrowers for a
mortgage or business or an education loan. For credit unions,
program participation entails assisting account holders in
meeting their savings goals. Generally, this assistance involves
providing services your credit union already offers, such as
financial education or counseling. To learn how other credit
unions have participated in the program, visit the online AFI
Grantee Showcase.
HHS provides grants to nonprofit organizations, including
low-income designated credit unions, to encourage them to
offer IDAs. To learn more, participate in an AFI webinar.
The webinar is free, but registration is required online
at
http://idaresources.org/Calendar. Upcoming webinar
dates include:
; Jan. 10, 2 pm [ET]: AFI Program Overview and Grant
Application Process
; Jan. 19, 2 pm [ET]: AFI Question and Answers Conference
Call for Prospective Grantees
; Feb. 14, 2 pm [ET]: Tips for Developing Resources and
Partners for AFI Projects
; Feb. 28, 2 pm [ET]: AFI Program Overview and Grant
Application Process
To learn more about other resources available through NCUA’s
Office of Small Credit Union Initiatives, watch our video, An
Introduction to the Office of Small Credit Union Initiatives, at
http://bit.ly/vsHHfE.
NCUA PROPOSES REG FLEX RELIEF (FROM PAGE 1)
The RegFlex relief proposed rule has seven components.
Specifically, the proposal would allow all FCUs to:
; Make charitable contributions to charities of their choosing;
; Accept non-member deposits, subject to predetermined
limits, from local governmental entities or other
credit unions;
;Use a six-year time horizon to partially occupy
unimproved property they acquire for future expansion;
; Obtain certain exceptions to eligible obligations constraints;
; Enter into borrowing repurchase transactions in which the
purchased securities have maturities that exceed the
maturity of the borrowing repurchase agreement, provided
the investment value does not exceed net worth, and
subject to certain mismatch timing constraints;
;Purchase private-label commercial mortgage-related
securities, subject to certain net worth constraints and four
safety and soundness investment criteria; and
Chairman Matz added, “The NCUA Board is mindful of the
regulatory compliance burdens credit unions face daily. Many
of the compliance challenges about which credit unions
complain to NCUA are statutory in nature, such as the Bank
Secrecy Act, or the Truth in Lending Act, and are not rules
NCUA can directly control. The Board continues to look for
responsible ways to modernize NCUA’s rules governing credit
unions, to make them as least burdensome as possible
without compromising safety and soundness, and this
proposal is a further step in that direction.”
NCUA issued the proposal with a 60-day comment period.
You can view the proposed rule at
http://www.ncua.gov/
about/BoardActions/Pages/ DraftBoard.aspx and click on the
RegFlex Relief proposed rule.
