NCUA LID Workbook Updates: Insights and Opportunities for Credit Unions

Navigating the Landscape of Low-Income Designations

In the ever-evolving landscape of finance, credit unions play a crucial role in serving diverse communities, including those designated as low-income. The Low-Income Designation (LID), determined by the National Credit Union Administration (NCUA), is more than just a label; it is a pathway to understanding and addressing the financial needs of underserved populations, among other benefits for credit unions. Since the NCUA released its 2022 LID workbook, it's important for credit unions to understand the updates and the implications these changes hold for service strategies.

This blog dives into the latest findings from the NCUA’s 2022 LID workbook, comparing them with data from 2020 to review changes in the geographical distribution of low-income populations. By reviewing these patterns at county and state levels, we hope to provide credit unions with the knowledge they need to make informed decisions about where to focus their growth efforts, how to tailor their financial products, and the best ways to truly serve these communities.

The Updates

At the end of June 2024, the NCUA published their 2022 LID workbook that indicates which geographies in the United States are low-income designated. A credit union can obtain a low-income designation if the majority of their members live within these geographies.

There are four geography levels at which low-income designation status is assessed: county, census tract, census block group, and zip code. We have excluded zip codes from this analysis as this level is not included in the public-facing NCUA workbook and the geography of zip codes is complicated. We compare here the 2020 and 2022 workbooks, as these are the two most recent versions which have been made available on the NCUA’s website.

Analysis

Overall, the percentage of the population which resides in LID-qualifying locations increased from 50.09% in 2020 to 57.56% in 2022. Below is a table representing what proportion of the population qualifies at each geography level:

At the State Level

At the state level, there were only two states which saw decreases in their LID population: District of Columbia, whose LID population declined from 48.49% to 48.37%, representing a decrease of 0.12 percentage points; and Delaware, whose LID population declined from 49.05% to 48.93%, also representing a decrease of 0.12 percentage points.

There were seven states which saw their LID populations increase by over 5 percentage points:‍

1)        Maryland (+7.44%)

2)        Wyoming (+6.98%)

3)        Alabama (+5.82%)

4)        Kentucky (+5.67%)

5)        Vermont (+5.34%)

6)        Mississippi (+5.17%)

7)        Montana (+5.14%)

At the County Level

At the county level, there were 7 counties that went from some LID-qualified population to 0% LID-qualified:

·      Lincoln (CO) – 62.18% in 2020

·      Boyd (NE) – 58.98% in 2020

·      Mitchell (KS) – 55.71% in 2020

·      Eureka (NV) – 55.14% in 2020

·      Wayne (UT) – 49.41% in 2020

·      Union (IN) – 48.66% in 2020

·      Nuckolls (NE) – 47.48% in 2020

A couple of other counties that saw significant decreases in both the percentage and number of LID-qualified individuals are:

1)        Dutchess County (New York) – OverallLID-qualified population decreased by 28,412 from 34.55% to 24.62%,representing a decrease by 9.93 percentage points

2)        Sussex County (Delaware) – OverallLID-qualified population decreased by 16,132 from 49.37% to 40.53%,representing a decrease by 8.84 percentage points

There were 18 counties that went from less than 50% of their population being LID-qualified to being 100% LID-qualified. A couple of counties, which saw significant increases in both their percentage and number of LID-qualified individuals, include:

1)        Prince George’s County (Maryland) –Overall LID-qualified population increased by 369,256 from 64.57% to 100%, a percentage point increase of 35.43

2)        Hays County (Texas) – OverallLID-qualified population increased by 128,455 from 52.46% to 100%, a percentage point increase of 47.54

How CUCollaborate Can Help

To find out how CUCollaborate can help your credit union attain and retain Low-Income Designation, meet with us to find out how we can connect you to these areas. With our insights and tools, you can better serve these communities, design products that really help, and streamline your path. At CUCollaborate, we’re all about helping credit unions like yours do more and mean more in the places you serve. Get in touch to see how we can work together to make a bigger impact.

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