The National Credit Union Administration (NCUA) recently released its annual report to Congress detailing the financial condition of minority credit unions.
The report discussed the agency’s efforts to preserve and promote the formation of minority depository institutions.
“Financial inclusion means expanding access to safe and affordable financial services for unbanked and underserved people and communities as well as broadening employment and business opportunities,” Hood said in a release accompanying the report. “We all must work together because all of us have a stake in the outcome. We all benefit when more of our citizens can control their financial futures and enjoy the benefits and opportunities this nation provides.”
The 2019 Annual Report to Congress on Preserving Minority Depository Institutions (MDI) is submitted in accordance with Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and 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 members are minorities. A “minority” is defined as any “Black American, Asian American, Hispanic American, or Native American,” as defined in Section 308 FIRREA Act.
MDI credit unions often are the only federally insured financial institution available in rural and urban communities that have been historically unserved by traditional financial institutions, NCUA said in its release.
At the end of 2019, the NCUA regulated 514 federally insured credit unions with the MDI designation in 36 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. MDI credit unions served more than 3.9 million members and had assets of $40.5 billion.
Approximately 10 percent of all federally insured credit unions are MDIs. These institutions are generally small — 57 percent of them have less than $10 million in assets.
Through the NCUA’s MDI Preservation Program, MDI credit unions have access to grants and loans, training and technical assistance, and guidance from their examiners. In 2019, the NCUA:
- Chartered one new MDI credit union, Otoe-Missouria in Red Rock, Okla.;
- Provided 58 low-income-designated MDI credit unions with $738,000 in technical assistance grants; and
- Provided three MDI credit unions with nearly $75,000 in grants under the agency’s mentoring program pilot.
Building on the success of its MDI initiatives last year, the NCUA in 2020 has:
- Co-sponsored the Freedman’s Bank Forum with the U.S. Department of Treasury and other federal financial institution regulators on March 3;
- Hosted a two-day MDI Forum on March 3-4; and
- Made $125,000 available to support MDI credit unions through our MDI mentoring program.