Minority deposit credit union list grows for first time since 2013

The credit union market's financial inclusion performance improved in 2020 following nearly a decade of decline.

There were 520 minority deposit institutions (MDI) in 2020, or six more than at the end of 2019, according to the National Credit Union Administration, adding 2020 was the first year MDIs expanded since the NCUA began keeping MDI records in 2013. MDIs, which exist in 37 states, had been in decline since a high of 805 in 2013. Overall, MDI credit unions added about 400,000 members and assets of $10.6 billion in 2020.

A federally insured credit union qualifies as an MDI if 50% or more of current members, potential members, and board of directors are Black, Asian American, Latinx or Native American. MDI credit unions serve more than 4.3 million members across the country and reported total assets of $51.1 billion in 2020.

Examples of MDIs include the International Masons Detroit District Credit Union, the smallest MDI, which serves 20 Black members in Detroit. USC Credit Union, one of the largest MDIs and the nation’s largest credit union originator of student loans, serves more than 76,000 primarily Black members in Los Angeles. Texas leads the U.S. with 82 MDI credit unions, which have a total of more than a million members and $1.62 billion of assets.

MDI credit unions grew to meet the needs of members despite challenges posed by the COVID-19 pandemic, according to Todd Harper, chairman of the NCUA. “MDIs serve an invaluable role in the nation’s system of cooperative credit, and the NCUA will continue to support the growth and sustainability of MDI credit unions so they can provide safe, equitable, and affordable financial services in financial deserts and to underserved communities,” Harper said in a press release.

The NCUA approved expansions for 23 MDIs, allowing these credit unions to add 754 regions to their membership. The NCUA extended grant applications to MDI credit unions during the pandemic. The independent federal agency provided 48 low-income-designated MDI credit unions with about $460,000 in technical assistance grants and 18 MDI credit unions with about $103,000 in urgent need grants in 2020. The agency additionally gave three MDI credit unions $75,000 in grants to help obtain technical and other assistance from other credit unions.

By comparison, there were 142 insured MDI banks at the end of 2020, down from a peak of 215 in 2008, according to the Federal Deposit Insurance Corporation, noting 120 are MDI community banks. Bank MDIs total $287 billion in assets.

The FDIC found 14% of Black households and 12% of Latinx households did not have bank accounts in 2019, according to its latest annual report. The percent of all unbanked households declined from 2017 to 2019, when a record low 5.4% of U.S. households were unbanked.