NCUA Changes Low-Income Designation Rules to Better Account for Military Personnel

The NCUA expanded its low-income designation rules to help account for more military personnel when determining whether or not a credit union can become a low-income designated credit union, the agency announced Thursday.

The change allows members using an Army/Air Post Office or Fleet Post Office address as opposed to a physical street address to be included in the NCUA’s calculation of a credit union’s potential low-income designation. Previously, only the incomes of service members using a physical street address as their mailing address were geocoded into the NCUA’s income assessment tool.

Military personnel will now be considered in a similar manner to how students attending colleges, universities, vocational or technical schools are considered in the NCUA’s evaluation of a credit union’s low-income designation, the agency said.

“At the NCUA, we’re always looking for ways to foster greater financial inclusion, accessibility and opportunity for all Americans, which I consider to be the civil rights issue of our time,” NCUA Chairman Rodney Hood said. “This is a great step in being more inclusive when it comes to the members of the military. Because so many military members are just getting started, they may not have much experience in working with financial institutions, at least not yet. Currently, the NCUA encourages higher education by counting students in our methodology, and under my direction, the agency has determined we can encourage military service in a similar way.”

In February at CUNA’s Governmental Affairs Conference, NCUA Board Member Todd Harper pushed for such a rule modification that would better allow for military personnel living in the U.S. and abroad to be counted toward a credit union’s low-income designation.

“Our country is in an economic war against COVID-19, and the NCUA needs to do all that it can to help federally insured credit unions serve their members, including our troops, during these difficult times,” Harper said in a statement following the agency’s rule change announcement. “This decision will allow more credit unions that serve the military to qualify for designation as a low-income credit union and open the door to more resources.”

CUNA President/CEO Jim Nussle, who wrote a letter to Hood in March asking the NCUA to consider such a policy, praised the decision.

“We want to thank Chairman Hood because his action will allow more credit unions to leverage the LICU designation to serve low- and moderate-income individuals and communities, which is especially critical as financial first responders work diligently to serve members during the pandemic,” Nussle said. “Chairman Hood’s action will help more credit unions to qualify as low-income credit unions, extending to many military members living on bases the greater financial opportunities and expanded products afforded by this designation.”