By The Numbers: LICU, CDFI & Juntos Avanzamos

Many credit unions pursue service designations to demonstrate and expand their ability to serve low-income or otherwise vulnerable populations. Three of the most popular designations are low-income (LICU), community development (CDFI), and Juntos Avanzamos.

Almost 56% of credit unions have at least one designation, according to third quarter figures. The NCUA’s LICU status is the most common, with 55% of all credit unions having it. The other two designations require certifications so are much smaller in number. Slightly more than 9.1% of credit unions are CDFIs and just 2.7% are part of the Juntos Avanzamos network.

Source: Callahan’s Peer Suite. Learn more.

Low-Income Credit Unions

• A low-income credit union (LICU) is an institution in which a majority — 50.01% or more — of its membership qualifies as low-income as defined in Section 701.34 of NCUA Rules and Regulations.
• Benefits of being a LICU include the ability to: accept non-member deposits from any source; offer secondary capital accounts; qualify for exceptions from member business lending cap; and participate in NCUA’s Community Development Revolving Loan Program.
• Some 2,590 credit unions are designated as low-income, with assets ranging from less than $100,000 (Holy Trinity Baptist FCU, $25,899, Philadelphia, PA) to more than $20 billion (Golden 1 Credit Union, $20.5B, Sacramento, CA).
• Although the perception is most LICUs are smaller, in fact all peer groups have LICUs represented within their ranks. At least 45% of all credit unions in each asset band meet the criteria for LICU designation. The highest concentration is in the $1B-$10B peer group, for which 60% are designated as a LICU.
• Slightly more than half of all credit union members — 73 million members — belong to a LICU.

CDFI Credit Unions

• Community development financial institutions (CDFIs) are defined as “mission-driven financial institutions that create economic opportunity for individuals and small businesses, quality affordable housing, and essential community services in the United States.” There are four types: banks, credit unions, loan funds, and venture funds.
• Certified CDFIs can access grants from the CDFI Fund, which was created in 1994 as a bipartisan initiative to promote economic revitalization and community development through investment in and assistance to CDFIs.
• There are 432 CDFI-certified credit unions, of which 95% are also LICUs. They range in asset size from $150,000 (Berean Credit Union, $158,285, Chicago, IL) to $17 billion (Suncoast Credit Union, $17.0B, Tampa, FL) and represent almost 20 million members.
• Similar to LICUs, credit unions of all asset sizes have the designation. However, because certification takes more effort than the calculus of LICU status, credit unions between $100 million to $1 billion in assets have the highest percentage — 14%-18% of the peer group — of this designation within their rank

Juntos Avanzamos = Together We Advance

• Juntos Avanzamos is “a designation for credit unions committed to serving and empowering Hispanic and immigrant consumers [by] helping them navigate the U.S. financial system and providing safe, affordable, and relevant financial services,” according to the Inclusiv, whose mission is to help low- and moderate-income people and communities achieve financial independence through credit unions.
• Originally developed by the Cornerstone League, today the CDFI intermediary Inclusiv leads Juntos Avanzamos in partnership with the Network of Latino Credit Unions and Professionals (NLCUP), Coopera, and a network of leagues.
• Currently, 130 U.S.-based credit unions have achieved this certification, ranging in assets from $700,000 (Community Promise FCU, $770,550, Kalamazoo, MI) to $18 billion (Randolph-Brooks FCU, $17.9B, Live Oak, TX). This group represents almost 11.5 million members.
• More than 85% of Juntos Avanzamos credit unions have at least one other designation, with almost half having all three at once.