NCUA supports CARE Act with IDAs

<p>ALEXANDRIA, Va.-The NCUA Board wrote a letter to each Senate Finance Committee member week in support of provisions in the CARE Act (S. 1924) allowing all credit unions to sponsor individual development accounts (IDA). At present, only low-income designated credit unions can sponsor IDAs. IDAs help lower-income persons create wealth by matching savings for eligible individuals to use toward the purchase of a home, start a small business, or post-secondary education. “The CARE Act would allow all credit unions the same opportunity to play a significant role in encouraging Americans to improve their savings habits. With many credit unions adopting `underserved areas,’ this financial tool could be put to good use,” the letter read. The bill was introduced by Senators Joe Lieberman (D-Conn.) and Rick Santorum (R-Pa.). It limits matching funds to $500, which can be matched by the credit union or, more likely, by another organization such as a church. NCUA Director of Public and Congressional Affairs Cliff Northup said that the agency does not typically get involved in lobbying for legislation. However, as the entity that designates low-income credit unions, which currently are eligible to sponsor IDAs, NCUA has an interest in getting more credit unions involved. He added that low-income designated credit unions could help regular credit unions in setting up programs. “These are costly [accounts]. It’s not an easy thing to do unless the program is well designed,” Northup said. He said the letter was sent to assure the committee that credit unions are already participating and “could easily do this on a wider basis.” IDAs also fit very well with the NCUA’s Access Across America program, designed to bring more consumers into mainstream financial institutions.</p>