Low Income Credit Union (LICU) Designations Explained

Among the 4,700+ federally insured credit unions in the United States, about 2,700 carry a special NCUA designation: Low Income Credit Union, or LICU. It's a meaningful signal about who a credit union serves and what regulatory flexibilities it has access to.

What LICU means

NCUA grants the Low Income designation to credit unions where a majority of members — more than 50% — are "low income" as defined by the agency. NCUA's threshold: members whose annual household income falls at or below 80% of the median household income for the surrounding area, or whose annual income falls below the federal poverty level.

NCUA determines LICU eligibility primarily through analysis of member addresses and census tract income data, cross-referenced with member income where available. Credit unions can also apply directly by documenting that their membership meets the threshold.

Regulatory benefits of LICU status

LICU designation unlocks several regulatory advantages that allow these credit unions to serve underserved communities more effectively:

• Access to secondary capital: LICUs can accept deposits from non-members, including other financial institutions, CDFIs, and public agencies. This is normally prohibited for credit unions.
• CDRLF grants and loans: LICUs are eligible for the NCUA Community Development Revolving Loan Fund (CDRLF), which provides low-interest loans and technical assistance grants.
• Expanded membership: LICUs may add underserved areas to their field of membership without amending their charter.
• Payday alternative loans (PALs): LICUs have additional flexibility in offering PAL products that provide a safer alternative to high-cost payday loans.

LICU and CDFI overlap

Many LICUs also carry Community Development Financial Institution (CDFI)certification from the US Treasury's CDFI Fund. CDFI certification is separate from LICU designation but overlaps substantially — both focus on serving economically distressed communities. CDFIs are eligible for federal grants, tax credit programs, and bond guarantees that further expand their capacity.

Minority Depository Institutions (MDI)

Related but distinct: NCUA also tracks Minority Depository Institutions — credit unions where a majority of members, directors, or account holders are minorities, or whose primary mission serves minority communities. MDI credit unions play a critical role in Black, Hispanic, Asian-American, and Native American communities that have historically faced exclusion from mainstream financial services.

Bank Scorer displays both LICU and MDI designations on every credit union profile and browse page.

Why LICU matters for consumers

If you're looking for a credit union that specifically serves low-income communities — whether as a member or as a researcher evaluating community impact — LICU designation is a reliable filter. These institutions have explicitly committed to an underserved membership and have NCUA's regulatory acknowledgment that they do so.

For consumers in those communities, LICUs often offer products designed for members with thin credit files: small-dollar loans, credit-builder products, and individual development accounts. Their loan officers typically have more discretion than large banks.

How to find LICUs

Bank Scorer lets you filter all 4,700+ federally insured credit unions by LICU designation. You can further narrow by state, sort by assets or members, and click through to see the financial profile for any institution.