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Q. What is the purpose of the National Credit Union Administrations (NCUA’s) Small Credit Union Program (SCUP)?
A. The purpose of SCUP is to facilitate NCUA goals of promoting the development of financially healthy small and low-income designated credit unions.
Q. What credit unions qualify for this program?
A. This program was designed to provide assistance to credit unions that fall within the following criteria:
- Credit unions with assets under $5 million;
- Newly chartered credit unions in operation less than 10 years and with assets under $10 million; and
- Low-income designated credit unions.
Q. What are the benefits for a qualifying small credit union to also be designated as a low-income credit union (LICU)?
A. Credit unions designated as LICUs may accept non-member deposits, participate in the Community Development Revolving Loan Program (CDRLF), accept secondary capital funds, and receive technical assistance.
Q. What is the CDRLF?
A. The CDRLF was established to support low-income designated credit unions serving low-income communities. Low-interest loans/deposits are made available to assist these credit unions in delivering financial services to their members and improve their long-term growth and stability. Credit unions may receive an aggregate amount of $300,000 in loans. No credit union may have more than two separate loans outstanding at the same time. There is no minimum loan amount.
Q. Are small credit unions given any discount in fees or other expenses?
A. Yes. Currently federal credit unions under $500,000 in assets are not required to pay an annual operating fee (NCUA R&R 701.6) and those between $500,000 and $750,000 in assets only pay $100 per year.
Q. Small credit unions may be exempt from certain rules and guidelines. What are some of these?
A. Yes, there are a few exemptions based on asset size. Some of these are:
- Home Mortgage Reporting Act (Reg. C): Credit unions with assets of $34 million or less as of December 31, 2004, are exempt from data collection in 2005.
- NCUA LETTER NO: 03-CU-11 (Non-Maturity Shares and Balance Sheet Risk): Small credit unions with basic asset structures (e.g., signature and auto loans and short-term investments) are excluded from the scope of this guidance.
- Americans with Disabilities Act (ADA): Credit unions with 15 or more employees are not obligated under ADAI to provide non-discriminatory employment opportunities to qualified individuals with disabilities and prohibit harassment based on disability.
- Title VII of the Civil Rights Act: Only credit unions with 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year are impacted by the law which prohibits harassment of an employee based on race, color, sex, religion, or national origin.
- Age Discrimination in Employment Act (ADEA): Only affects credit unions with 20 or more employees. The ADEA prohibits discrimination of employees who are 40 or older on the basis of age.
- Equal Employment Opportunity Act: Only affects credit unions with 15 or more employees. Require posting of certain notices and covers sexual harassment guidelines.
- Florida Civil Rights Act [F.S. 760: Only affects credit unions with 15 or more employees. Require posting of certain notices and contains guidelines covering sexual harassment and discrimination based on age or marital status.
- Affirmative Action: Only affects credit unions with 50 or more employees treatment, as well as developing appropriate plans.
- Family Medical Leave Act: Only affects credit unions with 50 or more employees. Contains requirements for granting medical or family leave.
NOTE: Small credit unions with less than 15/20 employees should keep in mind that the state and/or city may have ordinances requiring companies of all sizes to comply with EEO related laws and regulations. It is recommended that small credit unions comply with all anti-discrimination laws even though not specifically covered by the statutes.
Q. What are a small credit union’s rights under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)?
A. Those credit unions with less than $10 million in assets also have the right, if they so choose, to contact the Small Business Administration’s Ombudsman rather than NCUA’s Ombudsman to provide comments on any NCUA compliance or enforcement activity.
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