Credit unions around the country faced tough times in 2020, as the Coronavirus forced businesses to close doors and CUs had to turn to digital solutions to satisfy their member’s needs. While most CUs were able to stay afloat and provide members with the financial products and services they needed, 2021 will likely bring more challenges and adversity. Luckily, for some credit unions serving low-income communities, grants are available from the National Credit Union Association (NCUA) that can help.
Every year the NCUA provides resources in the form of grants and awards so that CUs can better serve their communities. These grants are provided through the Community Development Revolving Fund (CDRLF) and are rewarded to CUs to expand access to financial products and services to members in rural and underserved communities. In 2021, there will be a total of 1.5 million dollars in grant money awarded to CUs who qualify.
Minority grant available from the NCUA in 2021
One grant that can be helpful to smaller, lower-income designated credit unions is the Minority Depository Institution (MDI) Mentoring award. The MDI Mentoring award is a mentoring initiative that pairs strong, experienced credit unions with smaller MDI institutions to work together to increase growth and expansion, improve management operations, trainings and policies, and increase the CUs capabilities with new programs or services.
Here is some more information about the grant:
- Who is eligible? Credit unions must be designated as low-income through the NCUA to apply. To determine your CU’s eligibility, review the full application instructions.
- What is a minority depository institution? An MDI institution is defined by NCUA as a CU where the majority of its members and the community it services, as well as its board of directors, fall within the eligible minority groups of black American, Native American, Hispanic American or Asian American.
- What can it be used for and who funds it? The grant can be used for any eligible expenses that are related to facilitating the mentorship relationship between credit unions. The NCUA’s grants are funded by Congress.
- What is the award amount? The maximum award amount in 2021 is $25,000. There is no minimum award amount.
- What other grants are available? There are two other grants available through NCUA and the CDRLF for low-income designated credit unions. They include the Digital Services and Cybersecurity grant (maximum award $7,000) and the Underserved Outreach grant (maximum award 50,00).
The recipient of this funding will have demonstrated a well-developed plan for the mentoring assistance it would receive from a mentor credit union. Applicants are expected to meet the objectives of this initiative by establishing a mentorship to accomplish the following objectives:
- Credit union growth and expansion, such as growing the membership or the loan portfolio;
- Improved management and operations, such as leadership training, developing new policy and procedure documents, or responding to exam or audit findings;
- Increased credit union capabilities, such as introducing a new program or service or improving credit union systems; and/or
- Other (applicants will have the opportunity to justify additional projects).
It is the NCUA’s hope that the MDI Mentoring award, and other initiatives, can help improve and expand financial products, services, and education in underserved communities throughout the country. For CUs who qualify, a grant in 2021 could be a great way to help your CU and members.
It’s also important you choose your credit union core technology carefully. Having the right credit union core software can help improve digital banking services and satisfy your member’s needs.