Community Development Revolving Loan Fund Program for Credit Unions

 

The purpose of the Community Development Revolving Loan Fund (CDRLF) program is to assist low-income designated credit unions (LICUs) in providing basic financial services to their members to stimulate economic activities in their communities. Through the CDRLF program, the NCUA provides financial support in the form of technical assistance grants and reduced-rate loans to LICUs serving predominantly low-income members. The CDRLF program consists of Congressional appropriations that are administered by the NCUA.

Active 44.002 National Credit Union Administration B - Project Grants; C - Direct Payments For Specified Use; E - Direct Loans Fiscal Year 2016 For the 2016, Grant Round, received 1,430 applications totaling $9.6 million. Grants totaling nearly $2.5 million will help 309 low-income credit unions expand services to underserved communities, train staff, improve cybersecurity and provide students with work experience. Funding Information: 309 CREDIT UNIONS RECEIVED $2,499,187 IN GRANT AWARDS. THE 309 OSCUI PROGRAM AWARD RECIPIENTS ARE LOCATED IN 41 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE VIRGIN ISLANDS. 50 ARE MINORITY DEPOSITORY INSTITUTIONS. In the most recent round, NCUA awarded grants in four initiative areas: • Capacity and growth: NCUA awarded 116 grants, totaling $1,495,163, to credit unions expanding financial access to underserved communities through digital products, lending programs and other growth strategies. • Cybersecurity: NCUA awarded 112 grants, totaling $752,529, to help credit unions better protect member information and other sensitive data. • Student internships: NCUA awarded 33 grants, totaling $125,795, for credit unions to provide students with professional work experiences. • Staff training: NCUA awarded 48 grants, totaling $125,700, for credit unions to train staff in areas like lending, collections and governance. For the 2016, Grant Round, received 1,430 applications totaling $9.6 million. Grants awarded total to approximately 2.5 million will help 309 low-income credit unions expand services to underserved communities, train staff, improve cybersecurity and provide students with work experience. Funding Information: 309 CREDIT UNIONS RECEIVED $2,499,187 IN GRANT AWARDS. THE 309 OSCUI PROGRAM AWARD RECIPIENTS ARE LOCATED IN 41 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE VIRGIN ISLANDS. 50 ARE MINORITY DEPOSITORY INSTITUTIONS. In the most recent round, NCUA awarded grants in four initiative areas: • Capacity and growth: NCUA awarded 116 grants, totaling $1,495,163, to credit unions expanding financial access to underserved communities through digital products, lending programs and other growth strategies. • Cybersecurity: NCUA awarded 112 grants, totaling $752,529, to help credit unions better protect member information and other sensitive data. • Student internships: NCUA awarded 33 grants, totaling $125,795, for credit unions to provide students with professional work experiences. • Staff training: NCUA awarded 48 grants, totaling $125,700, for credit unions to train staff in areas like lending, collections and governance.
Fiscal Year 2017 415 applications totaling $4.4 million were received during FY17. 274 applications totaling $2.4 million was awarded during FY17.
Fiscal Year 2018 243 applications totaling $2.5 million were received during FY18. 203 applications totaling $2 million was awarded during FY18. 12 - Banks and Banking U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1772c-1, 1782, 1784, 1785 and 1786. Federal and state chartered credit unions that have a low-income designation from the NCUA and/or appropriate state regulator pursuant to NCUA Rules and Regulation at SS701.34(a)(1) or SS741.204. In the case of a non-federally insured, state-chartered credit union, a low-income designation from a state regulator, made under appropriate state standards with the concurrence of NCUA. Services to low-income members must include, at a minimum, offering share accounts and loans. A credit union wishing to participate must serve a field of membership which is comprised primarily of low-income individuals. To participate in the CDRLF Program, a federally chartered credit union must be currently designated as a "low-income" credit union as set forth in NCUA's Rules and Regulations. A state-chartered credit union must have the equivalent low-income designation from its respective state supervisory authority and concurrence from NCUA. 12 CFR 701.34 A low-income designated credit union is one in which more than half of its members meet the NCUA definition for a "low-income member." Low-income members are those who earn 80 percent or less than the median family income for the metropolitan area where they live, or the national metropolitan area, whichever is greater. Low-income designated credit unions have offices and serve members throughout the United States, Puerto Rico, Guam, and the U.S. Virgin Islands, and on military bases around the world. Depending on the charter type, these credit unions serve occupational groups, associations and communities. Evidence of Chartering from the National Credit Union Administration. Evidence of Low Income Designation (12 CFR 701.34). DUNS Number - An active DUNS Number for the Applicant is required to apply. Active SAM.gov Account - An active SAM.gov account status and CAGE number is required to apply. Preapplication coordination is not applicable. 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. Process for Grants: (1) Credit unions fulfill all application responses and requirements for the grant and submit the request online. (2) NCUA will thoroughly review the application according to the selection process in the grant guideline. (3) NCUA will make a final decision and notify the credit union whether the request is approved or denied via email. (4) If the request is approved, then the credit union may initiate the project that was applied for. (5) After the project is completed and the credit union fulfills all of the grant requirements then they may submit a reimbursement request to the NCUA. Process for Loans: (1) Credit unions fulfill all application responses and requirements for the loan and submit the request online. (2) NCUA will thoroughly review the application according the criteria established in NCUA Rules and Regulations 12 CFR 705.7(c). (3) NCUA will make a decision and notify the credit union whether the request is tentatively approved or denied via email. (4) If the request is tentatively approved, NCUA will provide credit unions with instructions to complete the necessary loan documentation. (5) Credit unions review, sign, and submit the required loan documentation including, but not limited to, a loan agreement, promissory note, and amortization schedule. (6) NCUA will review and sign the loan documentation, then notify the credit union of the final approval via email. (7) NCUA will provide the credit union with copies of the signed loan documentation. (8) NCUA deposits the funds into the credit union's account on the effective date of the loan. The award procedure generally involves two or three steps of review by different staff. The final approval authority is completed by the Director (or designee) of the NCUA's Office of Credit Union Resources and Expansion. Three Step Review Process: The Initial Reviewer (IR) evaluates the request and determines if it satisfies the criteria for approval set forth in program guidelines. Then the Grant Administrator (GA) reviews the IR's recommendation to either confirm the recommendation or make another recommendation. Lastly, the Office Director or Deputy Director (OD) reviews the GA's recommendation to either confirm or deny the GA's recommendation, which results in a official final decision. Two Step Review Process: This process follows the same protocols as the Three Step Review Process. However, the GA initiates the evaluation of the request and determines if it satisfies the criteria for approval set forth in program guidelines. Then, the OD reviews the GA's recommendation to either confirm or deny the GA's recommendation, which results in a official final decision. The difference in this step is that the GA bypasses the IR's step during this process and is used for faster response on more simplified applications. Contact the headquarters or regional location, as appropriate for application deadlines From 60 to 90 days. From 15 to 30 days. Appeals of non-qualification: A Qualifying Credit Union whose application for a loan or technical assistance grant has been denied under SS705.7(f) for failure to satisfy any of the conditions set forth in SS705.7(c), including any additional criteria set forth in the related notice of funding opportunity, may request the Director of the Office of Credit Union Resources and Expansion to reconsider the denial and/or appeal that decision to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter, subject to the following limitations: (1) Scope: The scope of the Board's review is limited to the threshold question of qualification and not the issue of whether, among qualified applicants, a particular loan or technical assistance grant is funded. (2) Appeals procedures inapplicable: The foregoing procedure applies during an open period in which funds are available and NCUA has called for applications. NCUA will reject any application submitted during a period in which NCUA has not called for applications, except for applications submitted under SS705.8. Such rejections are not subject to appeal or review by the NCUA Board. Appeals of technical assistance grant reimbursement denials: Pursuant to NCUA Interpretative Ruling and Policy Statement 11-1, any Participating Credit Union may appeal a denial of a technical assistance grant reimbursement to NCUA's Supervisory Review Committee. All appeals of technical assistance grant reimbursements must be submitted to the Supervisory Review Committee within 30 days from the date of the denial. The decisions of the Supervisory Review Committee are final and may not be appealed to the NCUA Board. Grant Extensions If a grant award has not been used prior to the grant expiration date then credit unions may submit a request to extend the grant's performance period by emailing a completed grant extension request form to the NCUA. Extensions may be authorized for a maximum of 18 months only (within 18 months after the original grant expiration date). The NCUA will approve or reject the grant extension request and notify the credit union by email. Renewals are not available for CDRLF awards. The selection process for CDRLF grants includes the following steps. Some grant initiatives may not require a certain step. In addition, the evaluation performed for each initiative may differ for each step but the overall description of each step outlines the activity conducted by NCUA. Eligibility Review Step: The NCUA will review each application to determine if the credit union meets the eligibility requirements. Credit unions are not ranked during this step. However, credit unions that do not meet the eligibility requirements are unable to proceed to the next step. Project Objective Review Step: The NCUA will use information and responses from the application to determine if the credit union's project goals align with the objective of the initiative. Credit unions that apply for projects that do not align with the objective of the grant initiative are unable to proceed to the next step. Application Ranking Order Step: The NCUA will score each application according to the ranking order criteria established in the grant guideline for the respective initiative. Compliance Review Step: The NCUA will assess each credit union's past adherence to reporting requirements and guidelines for previous CDRLF awards. In addition, the NCUA may assess a credit union's examinations or reports and findings from an audit if deemed necessary by a reviewer. Some credit unions may not proceed to the next step, depending on the results of the compliance review. Grant Amount Determination Step: The NCUA will determine the recommended grant amount for each application based on various factors such as the specific project, amount requested, funding availability, and the compliance review results. Funding will be distributed until the grant allocation is exhausted. The selection process for CDRLF loans includes the following steps. Eligibility Review Step: The NCUA will review each application to determine if the credit union meets the eligibility requirements. Substantive Review Step: The purpose of the substantive review step is to determine whether the NCUA should support and fund the loan request. During this phase of the review, the NCUA reviews the credit union's prior financial and operational performance, the collateral offered to securitize the loan (if applicable), and its longevity in operation. The preliminary results of the substantive review is determined by using a structured decision process. Regional Office and/or State Supervisory Authority (SSA) Review Step: The respective NCUA regional office and/or SSA determines whether they concur with the results of the substantive review. Loan Amount Determination Step: The NCUA will determine the recommended loan amount for each application based on various factors such as the specific project, amount requested, funding availability, and the substantive review results. Funding will be distributed, subject to funds availability. In order to meet the objectives of the CDRLF program, an applicant must be certified as a low-income credit union, and provide a variety of financial and related services designed to meet the particular needs of the low-income community served. Federal grants and loans under the program may generally be used for services that include 1) Provide basic financial and related services to its members and their communities; 2) Enhancing their capacity to better serve their members and the communities in which they operate; 3) Responding to emergencies. Performance Reports: For CDRLF Loans Credit unions that receives a CDRLF loan must report on the progress of providing needed community services to the Participating Credit Union's members once a year, either at the annual meeting or in a written report sent to all members. Credit unions must also submit to NCUA the written report or a summary of the report provided to members. Not applicable. CDRLF awardees are required to keep all financial, business and program reports necessary for program review and audit to ensure that funds have been expended in accordance with the applicable regulations, guidelines, agreements, and terms & conditions. Statutory Formula: Title 12: Banks and Banking Chapter VII Part 705 Subpart A

Matching is voluntary. NCUA may require (in some rare cases) credit unions to match the loan. If necessary, the credit union will be notified as part of the approval process.

MOE requirements are not applicable to this assistance listing. Technical Assistance Grants Credit unions approved for grant funds must utilize the funds and submit a reimbursement request by the grant expiration date provided at the time of approval (approval letter). Grant expiration dates range from 12 to 36 months. A grant extension may be permitted upon written request, for up to 12 months from the original date of expiration. CDRLF grant awards are reimbursements and disbursed as a lump sum when the credit unions reimbursement request is reviewed and approved. Loans 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 the specified rate at the time of the loan (refer to the NCUA's CDRLF Loan Interest Rate Policy for current rate). The term of a loan will not exceed 5 years from the date of award of the loan. CDRLF loans are disbursed as a lump sum on the effective date of the note. Method of awarding/releasing assistance: Lump. None/Not specified. Geetha Valiyil
1775 Duke Street
Alexandria, VA 22314 US
gvaliyil@ncua.gov
Phone: 703-518-6645

Ikenna Nwankpa
1775 Duke Street, CURE
Alexandria, VA 22314 USA
inwankpa@ncua.gov
Phone: 571-733-8781 https://www.ncua.gov/services/Pages/resources-expansion.aspx 25-4472-0-3-373 (Project Grants (Special)) FY 18$2,000,000.00; FY 19 est $2,000,000.00; FY 20 est $2,000,000.00; FY 17$2,389,085.00; FY 16$2,499,187.00; - (Direct Loans) FY 18$1,500,000.00; FY 19 est $2,000,000.00; FY 20 est $2,000,000.00; FY 17$500,000.00; FY 16$1,375,000.00; - This portion reflects the loans issued as part of the CDRLF Program. Loan amounts range from $10,000 to $500,000. There are no new congressional appropriations awarded to this revolving loan fund since 2005. This is a revolving fund (X fund). Smallest FY16 grant award - $200 Largest FY16 grant award - $15,000 Average FY16 grant award - $8,085 Smallest FY17 grant award - $1,500 Largest FY17 grant award - $25,000 Average FY17 grant award - $8,719 Smallest FY18 grant award - $1,300 Largest FY18 grant award - $20,000 Average FY18 grant award - $9,852 Regulations: 12 CFR Part 705, 12 CFR 701.34, and 2 CFR Part 200. CDRLF Program Materials: All CDRLF program materials are available on the NCUA's website. The URL address for these materials is below. URL Address: https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx. Fiscal Year 2016 Capacity & Growth The Capacity and Growth initiative helped credit unions establish new financial service relationships with their members. Grant funds were used to improve outreach efforts through the implementation of new deposit and lending products, enhance digital service channels, and explore other strategies for growth. Cybersecurity The cybersecurity initiative strengthened credit union technology systems against potential threats and vulnerabilities to confidential member information. Credit unions were able to enhance their security posture by investing in data encryption technology, biometric and multi-factor authentication systems and risk assessments for their IT systems. Staff and Volunteer Training As the credit union system evolves, credit unions must be diligent in obtaining the required training for management, staff, and volunteers. This initiative provided funds for low-income credit unions to offset the cost of training relevant to improving credit union operations and staff performance. Credit unions used grant funds to attend credit union management schools, attend credit union course trainings, purchase online training libraries, and participate in webinars. NCUA encouraged credit unions to attend training for compliance, lending and collections and financial counseling for front-line staff. Student Internships Student internship grant funds allowed credit unions to introduce students to the credit union system. Interns gained meaningful hands-on experience by assisting small credit unions in areas where, many times, there was a gap in staff expertise. Interns assisted credit unions in developing new marketing strategies including social media and web development, as well as providing insight to the younger demographics’ product and service needs. Through this initiative, students are better equipped to transition into a career in the financial services industry.
Fiscal Year 2017 Each credit union may apply for funding under one of three initiatives: • Leadership development (maximum grant $10,000)—Credit unions may use this grant to promote career development, management succession planning, diversity and inclusion training, or structuring essential employment positions. • Digital services and security (maximum grant $7,500)—Credit unions can improve digital member services as well as cybersecurity and fraud prevention under this initiative. This grant can be used to offer services like remote deposit capture, digital payments and wallets, or mobile loan applications or to provide cybersecurity training or digital encryption. • Small, low-income credit union capacity (maximum grant $7,500)—Credit unions with assets of less than $30 million may apply for funding under this initiative to address operational challenges such as upgrading technology systems for greater efficiency and improved operations. Applicants must fall under the $30 million asset limit. In addition to those initiatives, each credit union may apply for a grant of up to $25,000 to support projects designed to reach people living in underserved communities.
Fiscal Year 2018 Expansion of financial access to underserved communities through digital products. Protecting credit union information from cybersecurity threats. Promote professional development in the credit union industry. Prepare credit unions for success in the event of leadership transition. Enhance the operational and leadership skills of credit union staff and board members. Developing innovative outreach strategies that will improve the financial well-being of individuals living in underserved areas.
Fiscal Year 2019 Assisting credit unions in improving the financial well-being of individuals in underserved areas. Supporting development of digital tools for member outreach programs. Providing support for credit union staff seeking certification in financial education. Helping credit unions develop staff talents and skills. Encouraging strong and experienced credit unions to provide guidance to small minority depository institution (MDI) designated credit unions to increase their ability to thrive and serve low-income and underserved populations.