The National Credit Union Administration’s annual report to Congress on the composition and financial performance of the minority deposit institutions (MDIs) supervised by the agency in 2020 shows the number of MDI credit unions increased, expanded their membership, and increased lending.
“Even though COVID-19 caused many trials for federally insured credit unions in 2020, minority depository institutions, as a whole, met these challenges head on and grew by meeting the needs of their members,” NCUA Chairman Todd Harper said in a release.
“MDIs serve an invaluable role in the nation’s system of cooperative credit, and the NCUA will continue to support the growth and sustainability of MDI credit unions so they can provide safe, equitable, and affordable financial services in financial deserts and to underserved communities.”
According to the report, the NCUA regulated 520 federally insured credit unions with MDI designation by the end of 2020, up from 514 at the end of 2019. These institutions were located in 37 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. In 2020, MDI credit unions served 4.3 million members, up from 3.9 million in 2019. They also reported total assets of $51.1 billion at the end of 2020, up from $40.5 billion at the end of 2019.
The report is in accordance with Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), as amended by Section 367 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
A federally insured credit union can qualify as an MDI if 50 percent or more of its current members, eligible potential members, and board of directors are from one or a combination of the four minority groups defined in FIRREA, a NCUA release stated. These groups are any Black American, Asian American, Hispanic American, or Native American.
Often, MDI credit unions are the only federally insured financial institution available in rural, urban, and underserved communities. NCUA also offers an MDI Preservation Program, which provides eligible MDI credit unions access to grants, loans, technical assistance and guidance from NCUA examiners, and free on-demand training.
Efforts in 2020 included approving field-of-membership expansions for 23 MDIs, allowing them to add 754 groups or geographic areas to their membership; providing 48 low-income-designated MDI credit unions with approximately $460,000 in technical assistance grants and 18 MDI credit unions with approximately $103,000 in urgent need grants; providing three MDI credit unions with $75,000 in grants under the agency’s mentoring program to help them obtain technical and other assistance from stronger, more experienced institutions; and introducing the MDI Mentoring Cohort, which provided technical assistance and training to mentoring grant recipients.