By Nicholas Ballasy May 14, 2014
The NCUA announced $1.2 million in grants is available to low-income credit unions for the second round of this year’s Community Development Revolving Loan Fund.
In a Wednesday release, the NCUA said it will accept applications from June 2 to June 30. Each applicant can apply in any of the four grant categories. However, each credit union may only receive funding in a single category, the NCUA said.
Under the Community Development Financial Institution Certification category, the agency anticipates awarding 60 credit unions $2,500 each to cover the cost of applying for CDFI certification. A certified credit union is able to receive funding to assist low-income members and communities lacking access to affordable financial services.
Under the New Product and Service Development category, credit unions seeking to offer new electronic services could receive grants up to a preset amount based on the individual product.
“These services include first-time websites, home banking, mobile banking, bill pay, remote deposit capture, online loan and member applications, electronic or digital signatures, and debit, credit or prepaid cards,” the NCUA said. “Total allocation is $652,000, with a maximum award of $7,500 for each successful applicant.”
In the collaboration category, credit unions have an opportunity to receive grants of up to $50,000 each fora total of$200,000.
“Credit unions may use these grants to establish collaborative relationships for cost-saving projects like back-office operations, vendor due diligence and secondary capital investment pools,” the NCUA said. “A minimum of three credit unions must apply, with the lead credit union having low-income designation. Collaborations can include leagues, CUSOs or vendors.”
Grants of up to $3,000 each will be available in the training category to fund compliance, collections, lending and governance training. Total allocation will be $198,000.
“NCUA’s grants to low-income credit unions are wise investments in community development,” NCUA Board Chairman Debbie Matz said. “These grants have seeded a range of activities, from new products to technology modernization and staff training. Because NCUA’s grants to low-income credit unions can improve service and support local economies, I encourage all qualified credit unions to apply.”
The grants are funded through the Community Development Revolving Loan Fund and administered by the Office of Small Credit Union Initiatives. The fund was established by Congress to support credit unions that serve low-income communities.