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Funding Resources Uniquely Available to Low-Income Credit Unions

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By Jessica Jacobson, Director, Deposits, Strategy and Operations, CNote
February 9, 2024

In Q3 of 2023, 2,575 credit unions, comprising 55% of all federally insured credit unions, held a low-income designation (LID). This means that the majority of their actual or potential membership qualifies as low-income. Many of these LID credit unions play a pivotal role in providing essential services to underserved communities.

Among the resources LID credit unions require to provide these services is access to funds that can be put to work in the local community, funding the local small business loans and the loans that allow individuals to make investments in themselves and their families.

Here are three resources uniquely available to LIDs:

  • The LID designation facilitates improved access to resources by allowing these credit unions to receive nonmember and outside deposits up to $3 million or 50% of total shares, whichever figure is greater. This flexibility opens avenues to various sources of outside funding that can be put to use within the community, including foundations, corporate impact investors, grants, and depository solutions such as CNote’s Impact Cash®.
  • CNote’s Impact Cash® platform enables corporate impact investors to direct deposits to credit unions across the nation, offering a crucial boost, especially amid the anticipated $3.3 trillion drop in deposits projected by the end of 2024. With 70 percent of credit unions citing retail deposit growth as a key priority, this ability to open a wider field of deposits empowers LID credit unions to enhance member service by fostering lending, stimulating small business growth, and facilitating job creation.
  • LID credit unions also have access to technical assistance grants through the CDRLF which help LID credit unions enhance their capacity to better serve under-resourced communities. In 2023, approximately $3.5 million in awards were made available to LID credit unions through the CDRLF. These funds support critical areas of credit union development, such as training, underserved outreach, digital services, and strengthened cybersecurity. 
  • The NCUA also provides a revolving loan fund to assist LID credit unions’ efforts in supporting their members. A credit union can apply for a loan at any time, to be repaid in five years. The NCUA Office of Credit Union Development (OCUD) can tailor the specific terms and conditions of the loans to meet LID credit unions where they are. All loans, however, carry a fixed interest rate, which the NCUA board sets annually.

One example of a credit union that is leveraging its low-income designation to gain access to new capital sources is Opportunities Credit Union. Opportunities Credit Union has been a CNote partner since 2022, giving them access to no-cost deposits from a diverse range of corporate impact investors. These deposits provided additional resources for Opportunities to continue and expand their local community impact.

In 2023, low-income Vermonters received 75% of Opportunities’ loans, including 92% of consumer loans and 71% of mortgage loans. Opportunities also made 45% of its mortgage loans to New Americans. The credit union serves community members who are unhoused and underbanked, including individuals who are struggling with mental health, living in homeless shelters, and/or surviving on social security disability payments. Notably, in 2023, their MoneySense Program provided counseling to 501 individuals, offering crucial financial guidance and support. Over 3000 Vermonters have received financial counseling for free from Opportunities since 2021.

“Financial Inclusion is our DNA,” said Kate Laud, President & CEO of Opportunities Credit Union. “These deposits from values-based impact investors have been massively helpful in supporting our lending capacity to low-income communities as well as the unhoused and underbanked communities that we serve, embodying our commitment to fostering economic empowerment and resilience among all members of our community."

Low-income designated (LID) credit unions play a vital role in addressing the financial needs of underserved communities, with access to unique capital resources enabling them to make significant impacts.

Connect with CNote to learn how your LID credit union can partner with impact investors to receive deposits.


This information should not be relied upon as research, investment, legal or financial advice. CNote is not a legal, financial, accounting or tax advisor. This material is strictly for illustrative, educational, and informational purposes and is subject to change. Investing involves risks, including possible loss of principal.

About CNote

CNote is a technology platform that provides a sustainable flow of non-member deposits that are low-cost and deliver consistent value. This service is available at no cost to CUNA member credit unions as arranged by CUNA Strategic Services.