Florida's largest credit union now carries the low income designation

The 570,000-member, $5.6 billion Suncoast Credit Union, headquartered in Tampa, had been Suncoast Schools Federal Credit Union until it converted to a state charter on Jan. 1.

Under federal statute, a low income-designated credit union can accept deposits from non-members, offer secondary capital accounts, be made exempt from the aggregate limit on member business lending, and apply for grants and loans from NCUA and other federal agencies.

Perhaps most significantly, a low-income designation can be a key part in being recognized as a community development financial institution by the U.S. Treasury Department. As a recognized CDFI, a credit union can apply for grants from the CDFI Fund to help it launch new product or service lines or supplement its capital.

“As you might know, we changed to a community charter earlier this year and this is a natural follow on for our desire to focus on our community more effectively,” explained Suncoast CEO Tom Dorety. He added Suncoast would use the designation to apply for grants to help finance affordable housing, work with migrant laborers and generally better serve the credit union's lower income members.

Dorety also said Suncoast would apply for recognition as a CDFI. If it attains the recognition, it will become the largest CDFI in the country.

“I think this a very exciting moment,” said Cathie Mahon, CEO of the National Federation of Community Development Credit Unions, “when a credit union with the size and capacity of Suncoast has become designated low income. We have already begun working with them to hone their strategies for reaching to lower income and underserved communities in Florida.”

She also called it a very good sign for credit unions generally and suggested it would help convince other credit unions to examine the designation for themselves.

Federally chartered credit unions can be recognized as low income credit unions if 50% plus one member of its membership qualifies as low-income members.

Low-income members are defined, in part, as “members with a family income 80% or less than the median family income for the metropolitan area where they live or national metropolitan area, whichever is greater,” according to the NCUA.

Dorety said Florida-chartered credit unions can be recognized as low income if the NCUA certifies they qualify and the state regulator authorizes the designation.

At press time, no one from the Florida Office of Financial Regulation has yet commented on the qualifications state-chartered credit unions have to meet to be recognized as low income credit unions.