President’s Point: NCUA Mentoring Pilot

The people helping people philosophy is clearly at work in a new pilot program, the Minority Depository Institution (MDI) Mentoring Pilot, offered by the NCUA. The program provides opportunity for strong and experienced credit unions to provide guidance to small MDI credit unions to increase their ability to serve low-income and underserved populations.

This innovative idea encourages mentor relationships between larger low-income designated credit unions (Mentors) and small MDIs (Mentees) that are also designated as minority depository institutions. Through that partnership, the NCUA wants to help small MDIs receive needed technical assistance, training, and mentoring opportunities to assist them in serving their members.

The pilot is exploring feasibility of the grant initiative through small-scale trials to determine whether it’s ready for full-scale deployment, but the potential seems sound here. The collaborative arrangement is expected to help credit union unlock opportunities to manage expenses and meet regulatory requirements that require specialized expertise. Examples of how mentors can help smaller institutions include facilitating and providing access to an expanded ATM network; providing technical assistance on credit union investments portfolios; providing data processing services; and bulk purchasing office supplies.

The new program will offer three to five targeted technical assistance grants to help the smaller institutions, and the NCUA is offering grants of up to $25,000. Applications for grants open Aug. 18 and will be accepted through Sept. 28. The NCUA will notify applicants of the final decision and announce the award finalists by Nov. 1.

To apply for this grant, the Mentee must meet each of the following requirements:

  • Have a low-income designation granted by the NCUA or a similar state designation confirmed by the NCUA;
  • Qualify for and have a minority depository institution designation as of the June 30, 2019 Call Report cycle (the MDI designation is a self-identification process completed by the credit union through the CU Online Profile); and
  • Have a CAMEL Composite rating of 3 or better AND not more than one CAMEL Component rating of 4. Credit unions with more than one CAMEL Component rating of 4 or one Component rating of 5 are not eligible to participate.

The Mentor credit union must meet the following requirements:

  • Have a low-income designation granted by the NCUA or a similar state designation confirmed by the NCUA; and
  • Have a CAMEL Composite rating of 3 or better AND not more than one CAMEL Component rating of 4. Credit unions with more than one CAMEL Component rating of 4 or one Component rating of 5 are not eligible to participate.

Funding for the program comes through NCUA’s annual Community Development Revolving Loan Fund allocation.

To apply for a grant, visit the NCUA’s CyberGrants portal. Staff from the NCUA’s Office of Credit Union Resources and Expansion will be available to answer questions about the pilot program through Sept. 25. Credit unions should submit questions to staff by email to CUREAPPS@ncua.gov.