In a speech before the annual conference of the NationalFederation of Community Development Credit Unions in Atlanta onFriday, NCUA Board Chairman Debbie Matz said low-income designated credit unions are lending more than othertypes of financial institutions, and growing stronger as a resultof NCUA assistance.

“Low-income credit unions are national trendsetters. Thesededicated financial cooperatives are leading other lenders in loangrowth, while strengthening their safety and soundness,” Matz said.“The collective success of low-income credit unions demonstratesthat credit unions can do well while serving people of modest means.”

As a group, low-income credit unions led the nation in lendingthroughout the recession of 2008–2009, as well as the steadyrecovery of recent years, Matz said. Between December 2007 andMarch 2012, low-income credit unions expanded loans by $11 billion,a 57.6% increase.

During the same time period, the entire credit union industryexpanded loans by $45 billion, an 8.6% increase, while banksand thrifts decreased loans by approximately $500 billion,representing a decrease of 6.3%.

Low-income credit unions, which serve 6.6 million Americans,have steadily increased their lending in each of the last fourquarters, including a robust 4.6% increase in loan growth for thefirst quarter of 2012.

In comparison, credit unions' total loans inched up by 0.1% inthe first quarter, and the FDIC reported that loan balances atbanks and thrifts declined by 0.8% during the same timeframe.

“Most key indicators for low-income credit unions continued toimprove in the first quarter. Low-income credit unions as a groupnow have a net worth ratio of 10.25%, 24 basis points higher thanall federally insured credit unions,” Matz said. “Since year-end2009, return on average assets at low-income credit unions hasnearly doubled, delinquencies have held steady, and charge-offshave fallen by about a third.”

While low-income credit unions' delinquency rate (1.83%) ishigher than the credit union industry average (1.44%) theircharge-off rate of 0.65% is lower than the industry average of0.78%.

“These statistics reflect the unique nature of low-incomeborrowers,” Matz said. “Many low-income borrowers may pay slowly atfirst, but they work diligently to repay their loans.”

To help small and low-income credit unions grow stronger andprovide more services to their members, Matz highlighted theenhanced programs and services of NCUA's Office of Small CreditUnion Initiatives.

“During the last year, NCUA has greatly expanded its support forsmall and low-income credit unions by providing more strategicplanning consulting, offering a wider range of assistance, andrevamping our loan and grant program,” Matz said.

“As a result, OSCUI is reaching more credit unions through a mixof new and old technology, including DVDs, online videos, webinars,e-newsletters, phone calls, and in-person visits and workshops.Additionally, qualified credit unions can now use a streamlinedprocess to receive grants and loans with record-low rates,” shesaid.

Through the Community Development Revolving Loan Fund, the OSCUIoffers grants and loans for 1,119 credit unions with a low-incomedesignation. The NCUA has made available $1.3 million in grants and$11 million in loans this year.

Credit unions have until June 29 to apply for individual grantsup to $25,000. Loans up to $300,000 are available until funds arefully expended. The OSCUI may raise the loan amount for creditunions in special circumstances.