NCUA FOM – If a credit union has an underserved designation, and wants to expand its field of membership to an adjacent county, does the county have to have the same designation?

Compliance > NCUA
Q:  If a credit union has an underserved designation, and wants to expand its field of membership to an adjacent county, does the county have to have the same designation?
 
A:  We assume you are a low-income community charter wishing to remain low-income designated.  Adding an adjacent area that, in its entirety, is a well-defined local community could impact whether the expanded community still qualifies as a low-income community charter.  To clarify the difference between underserved and low-income, only multiple common bond credit unions can add an underserved area.  Adding an underserved area however does not automatically result in either and “underserved” or “low income” designation.  For NCUA to designate a credit union as a low-income community chartered credit union, more than 50 percent of the population within the geographic borders of the community must meet the low income thresholds.  As an alternative, any credit union serving a simple majority of qualifying members, including one with a community charter can obtain a low-income designation. 
 
 
 
ADDITIONAL INFORMATION:
This information was obtained from the NCUA’s website, Chartering and Field of Membership Resources page -    https://www.ncua.gov/services/Pages/field-of-membership-chartering.aspx
 

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