Section 70. Low-income designated credit unions

A. Upon the filing and investigation of a written application, the Commissioner of Financial Institutions (commissioner) shall designate a state-chartered credit union as a low-income credit union if (i) the commissioner finds that a majority of the credit union's members qualify as low-income members as defined in 12 CFR 701.34 and (ii) the National Credit Union Administration concurs with the designation. If the application filed by a credit union is denied, the commissioner shall notify the credit union of the denial and the reasons for the denial.

B. A low-income designated credit union shall have the following additional powers to the same extent, and subject to the same terms and conditions, as is authorized for federal credit unions that have obtained a low-income designation pursuant to 12 CFR 701.34:

1. To accept nonmember deposits in accordance with 12 CFR 701.32 and 12 CFR 741.204.

2. To accept secondary capital in accordance with 12 CFR 701.34 and 12 CFR 741.204.

3. To participate in the Community Development Revolving Loan Program in accordance with 12 CFR Part 705.

4. To be eligible for an exception to the aggregate loan limit on member business loans in accordance with 12 CFR 723.17 and 12 CFR 723.18.

5. To obtain funds from the Community Development Financial Institutions Fund operated by the United States Department of the Treasury.

Whenever any of the federal regulations referenced in this subsection require a credit union to submit a written request, plan, application, or other documents to the National Credit Union Administration, the credit union shall send a copy of such written request, plan, application, or other documents to the commissioner.

C. The commissioner may at any time, based upon supervisory, legal, or safety and soundness considerations, impose additional terms or conditions upon a low-income designated credit union in conjunction with its exercise of any of the powers enumerated in subsection B of this section.

D. A low-income designated credit union shall submit written reports to the commissioner containing any information that the commissioner may require concerning the credit union's services to low-income members.

E. 1. If the commissioner determines that a low-income designated credit union no longer meets the criteria for the low-income designation, the commissioner shall notify the credit union in writing. The credit union shall, within five years, meet the criteria for the designation or comply with the regulatory requirements applicable to state-chartered credit unions that do not have a low-income designation. The designation shall remain in effect during the five-year period.

2. If a credit union is unable to qualify again for the designation but has secondary capital or nonmember deposits with a maturity beyond the five-year period, the commissioner may extend the time for the credit union to comply with regulatory requirements to allow the credit union to satisfy the terms of any account agreements.

3. Within 60 days of the date of the notice from the commissioner, a credit union may appeal the commissioner's determination that the credit union no longer meets the criteria for a low-income designation to the State Corporation Commission by filing a petition in accordance with its Rules of Practice and Procedure (5VAC5-20).

4. A low-income designation shall be removed by the commissioner with the concurrence of the National Credit Union Administration.

Historical Notes

Derived from Volume 28, Issue 13, eff. February 15, 2012.

Statutory Authority

§§ 6.2-1303 and 12.1-13 of the Code of Virginia.