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Help available for starting
a credit union in a low-income area

For the little bankersIf your potential group of credit union members is considered to be low-income, the National Federation of Community Development Credit Unions was established to serve and represent financial cooperatives in low-income communities.

To secure the low-income designation, a credit union must be able to document that a majority of its member households earn less than 80 percent of the national median household income. That household standard was $26,457 during 1996; and $28,161 in 1997.

The NFCDCU has assisted many groups in organizing new credit unions in low-income communities in response to branch closings and "upscaling" by commercial banks. It can be reached at 1-212-809-1850 or by writing to 120 Wall Street, 10th Floor, New York, NY 10005-3902.

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The principal advantage of low-income designation is two-fold: A credit union can then accept deposits from nonmembers and may participate in National Credit Union Administration's revolving loan fund for community development credit unions.

The NCUA has established an Office of Community Development Credit Unions: call toll-free 1-800-827-6282 or write to 1775 Duke Street, Alexandria, VA 22314-3428.

Robbie Woliver is a freelance writer based in New York
To comment on this story, please e-mail the Bankrate.com editors

 

-- Posted: March 1, 2000

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See Also
Main story: Taking on the bank
AND: Why join a credit union?
PLUS: How to start your own credit union
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