Minority deposit credit union list grows for first time since 2013

The number of minority depository institution credit unions grew for the first time in nearly two decades.

MDI credit unions added about 400,000 members, assets of $10.6 billion and six new credit unions in 2020, the National Credit Union Administration announced last week. MDIs serve historically underbanked populations in the U.S.

The announcement marks the first time the total number of MDI credit unions rose in the U.S. since 2013, when the NCUA began tracking the number. Thirteen states do not have MDI credit unions.

The NCUA announced 520 MDI credit unions operate in the U.S., down from a peak of 805 in 2013. The types of MDI credit unions vary in scale. The International Masons Detroit District Credit Union, the smallest MDI, serves 20 Black American members in Detroit. USC Credit Union, among the largest MDIs and the nation’s largest credit union originator of student loans, serves over 76,000 members who are primarily people of color in Los Angeles.

MDI credit unions serve more than 4.3 million members across the country and reported total assets of $51.1 billion.

By comparison, the Federal Deposit Insurance Corp. recorded 142 insured MDI banks in 2020, down from a peak of 215 in 2008. However, the FDIC’s MDI records go back to 2001. The MDIs represent $287 billion in assets. Of those, 120 are MDI community banks.

The FDIC found 14% of African American households and 12% of Hispanic households did not have bank accounts in 2019, according to its latest annual report. The percent of all unbanked households declined from 2017 to 2019, when a record low 5.4% of U.S. households were unbanked, according to the report.

Texas leads the country with 82 MDI credit unions, which collectively have more than 1 million members and $1.62 billion of assets.

MDI credit unions grew to meet the needs of members despite challenges posed by the COVID-19 pandemic, according to Todd Harper, chairman of the NCUA.

“MDIs serve an invaluable role in the nation’s system of cooperative credit, and the NCUA will continue to support the growth and sustainability of MDI credit unions so they can provide safe, equitable, and affordable financial services in financial deserts and to underserved communities,” Harper said in a press release.

The NCUA approved expansions for 23 MDIs, allowing them to add 754 regions to their membership.

The NCUA extended grant applications to MDI credit unions during the pandemic lockdown. The independent federal agency provided 48 low-income-designated MDI credit unions with about $460,000 in technical assistance grants and 18 MDI credit unions with about $103,000 in urgent-need grants in 2020.

The agency also gave three MDI credit unions $75,000 in grants to help them obtain technical and other assistance from stronger, more experienced institutions.

A federally insured credit union qualifies as an MDI if 50% or more of current members, potential members, and board of directors are representative of Black American, Asian American, Hispanic American or Native American groups.

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