NCUA Official to Testify on Minority Depository Institutions

The director of the NCUA’s credit union resources and expansion office will testify Wednesday at a House Financial Services subcommittee hearing examining the plight of minority depository institutions.

Martha Ninichuk, director of the NCUA’s Office of Credit Union Resources and Expansion, will testify at the House Consumer Protection and Financial Institutions Subcommittee hearing.

In a staff memo outlining the hearing, Democratic committee staff outlined the Democratic subcommittee members’ concerns.

The staff said that the composition of the Minority Depository Institutions (MDI) has changed, with African American MDIs having all but disappeared. The financial crisis had a disproportionate impact on minority communities, the staff said.

For instance, more than one-third of all MDI credit unions have disappeared since 2013.

MDI credit unions represent 10% of all federally insured credit unions and tend to be smaller than others, with 87% reporting total assets of $100 million or less, according to the staff.

And the MDI credit unions underperformed in all growth categories.

The NCUA has a low-income designation for credit unions where more than half of the members are low-income and 80% of minority credit unions also are designated as low-income.

The subcommittee staff said that the NCUA is piloting a mentorship grant for credit unions under $100 million. The grants of up to $25,000 will enable the credit unions to pay for technical assistance from other credit unions.

The NCUA also has implemented a streamlined process that allows low-income credit unions to apply for Community Development Financial Institutions designation.