Omnibus Budget Reconciliation Act of 1981, as amended,
Sections 623, 633, and 681, Public Law 97-35, 95 Stat. 494, 498 and 518, 42
U.S.C. 9812, 9822 and 9910; Public Law 98-63, 97 Stat. 331; Public Laws
99-609, 101-144, and 103-325.
To support low-income credit unions in their efforts to:
(1) Stimulate economic development activities which result in increased
income, ownership, and employment opportunities for low-income residents; and
(2) provide basic financial and related services to residents of their
communities.
TYPES OF ASSISTANCE:
Direct Loans. Place Cursor Here for Definition
USES AND USE RESTRICTIONS:
In order to meet the objectives of the Community Development Revolving Loan
Program for Credit Unions, an applicant low-income credit union approved for
participation must provide a variety of financial and related services
designed to meet the particular needs of the low-income community served.
Federal funds loaned under the Revolving Loan Program may be used for services
that include activities aimed towards: (1) Supporting and stimulating economic
development and revitalization efforts aimed at benefiting the community it
serves. Recipients are encouraged to use funds available through the Revolving
Loan Program to serve as a catalyst to attract and stimulate the investment of
capital from other private and public sources to promote economic development
activities within the community; (2) providing member services such as
financial counseling; and (3) increasing the membership and the capitalization
base such as: (a) membership drives; (b) campaigns to encourage members to
increase their share deposits through systematic savings, utilizing such
methods as payroll deductions allotments; and (c) businesses and other
organizations serving the community to maintain share deposits or contribute
financially in other ways to projects supported by the credit union. Loans up
to $300,000, will be made to credit unions. All loans must be repaid to the
Community Development Revolving Loan Fund for Credit Unions within the
shortest time compatible with sound business practice and with the objectives
of the program, but in no case will the term exceed 5 years. Loans made under
this program shall bear interest at a rate of not less than 1 or greater than
3 percent per annum. Semi- annual interest and principal payments are required
by the Revolving Loan Program.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: All State and federally
chartered credit unions with a low-income designation are eligible. This
program is for established, financially sound low-income credit unions that
wish to increase member services in their communities. Credit unions in the
territories and the possessions are eligible to apply.
Beneficiary Eligibility: A credit union wishing
to participate must serve a field of membership which is comprised primarily
of low- income individuals. The credit union's field of membership should
correspond geographically to the designated program area described in its
application and may include employees who regularly work in the area,
businesses located within the area, and the residents of the area. In
particular cases, the community served may include a number of contiguous
neighborhoods constituting a target area. A target area is defined as that
area designated by the Economic Development Administration or another Federal
agency or by a State or local government agency for special assistance to
low-income residents such as special impact areas or enterprise zones.
Credentials/Documentation: The Community
Development Revolving Loan Program for Credit Unions requires low-income
credit unions to provide evidence of chartering from the appropriate Regional
Office of the National Credit Union Administration or a State credit union
regulatory agency. The board of directors will prepare a Community Needs Plan
(Plan) and submit it with its loan application. The Plan will contain a list
of needed community services that the credit union will provide. The board of
directors will provide a status report on the Plan's objectives to the credit
union members once a year either at the annual meeting or in a written report
sent to all members. The Plan's yearly status report will also be submitted to
NCUA annually. This Program is excluded from coverage under OMB Circular No.
A-87.
Pre-application Coordination: None. This program is
excluded from coverage under E.O. 12372.
Application Procedure: Applications for loans
competitively awarded in response to a program announcement are to be
addressed to: National Credit Union Administration, Community Development
Revolving Loan Program for Credit Unions, 1775 Duke Street, Alexandria, VA
22314- 3428. Applicants are urged to inform and to coordinate with State and
local governments where such information and coordination is appropriate or
necessary for the success of the program. This Program is excluded from
coverage under OMB Circular No. A-102.
Award Procedure: NCUA will notify applicant
credit unions as to whether they have qualified for a loan under the Revolving
Loan Program.
Deadlines: Notices of availability of funds will
be published in the Federal Register.
Range of Approval/Disapproval Time: From 30 to
120 days.
Appeals: Any applicant whose qualification is
denied may appeal that decision to the NCUA Board.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: The Revolving
Loan Program has no statutory formula. Loans made available under the program
must be matched by the participating credit union. Any loan monies matched by
member share deposits will be credited as a two-for-one match. Non- member
deposits are a dollar-for-dollar match.
Length and Time Phasing of Assistance: Financial
assistance made available in this program will be in the form of a loan which
is to be deposited in the credit union as either a non-member deposit or as a
note payable and must be repaid to the Revolving Loan Program at a rate of not
less than 1 or greater than 3 percent per annum. The term of the loans will
not exceed 5 years from the date of award of the loan. Funds will be released
directly to the credit union by NCUA, Community Development Revolving Loan
Program for Credit Unions.
POST ASSISTANCE REQUIREMENTS:
Reports: Loan recipients must submit a copy of the
Credit Union's Community Needs Plan with their application, annual audit
report of the Supervisory Committee, quarterly, semi-annual or other
financial, business or program reports as required by NCUA and a final report
summarizing the activities and accomplishments of the project in relation to
the approved goals and objectives.
Audits: The recipient credit union must submit to
NCUA annually the Supervisory Committee's audit report and the annual State or
Federal examiner's report within 30 days of issuance.
Records: Loan recipients are required to keep all
financial, business and program reports necessary for program review and audit
to insure that funds have been expended in accordance with the regulations,
loan agreement and terms and conditions of the Revolving Loan Program.
FINANCIAL INFORMATION:
Account Identification: 25-4472-0-3-373.
Obligations: (Direct Loans) FY 01 $8,981,000; FY
02 est $3,000,000; and FY 03 est $4,000,000.
Range and Average of Financial Assistance: From
$25,000 to $300,000.
CDRL Program, Federal Register, Volume 52 No. 179, September 16, 1987 (12 CFR
705) and Volume 54 No. 240, December 15, 1989.
INFORMATION CONTACTS:
Regional or Local Office: Not applicable.
Headquarters Office: Mr. Anthony Lacreta,
Community Development Revolving Loan Program for Credit Unions, National
Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428.
Telephone: (703) 518-6610.
Web Site Address: http://www.ncua.gov
EXAMPLES OF FUNDED PROJECTS:
Not applicable.
CRITERIA FOR SELECTING PROPOSALS:
All applications for assistance under the revolving loan
program must contain: (1) Information demonstrating a sound financial position
and the credit union's ability to manage its day-to-day business affairs.
Credit unions shall submit the following for the most recent month-end: (i)
balance sheet; (ii) income and expense statement; (iii) delinquent loan list.
(2) Evidence that the credit union has a need for increased funds in order to
improve financial services to its members. (3) Current designation as a low-
income credit union. (4) Specifics of how the credit union proposes to serve
the needs of its members and the community with Program funds. The applicant
credit union will also construct and submit a plan for its growth and
development. The plan will set forth financial growth, credit union
development, capitalization, and the means for achieving these objectives. (5)
How the credit union proposes to cooperate with existing community development
programs of State and Federal agencies, including the Department of Housing
and Urban Development, the Department of Health and Human Services as well as
others.
