Texas is the guiding star of a recent movement by credit unions serving inner-city and rural poor customers to accept nonmember deposits.

Since the National Credit Uniona Administration eased the "low-income status" qualification criteria on May 20, 11 credit unions have switched, including seven in Texas. More are expected to follow.

Institutions under the administrative designation "low-income" can accept nonmember

deposits and participate in the NCUA-administered Community Development Revolving Loan Fund, which offers low-interest loans and technical assistance.

"We're very excited about this opportunity in Texas," said Paula Martin, assistant vice president of the Texas Credit Union League's small credit union focus department.

With the funds available under the status, "we're actually able to bring the credit unions into the 21st century, with fax machines and other equipment they wouldn't be able to afford otherwise," she said. "We can also educate the credit union staff about finances."

The new regulation made qualifying easier by raising the income level under which a customer could be considered low income, easing the credit union's documentation requirements, and adding income differentials for high-cost areas.

The Texas league publications carried stories about the regulation after it was changed, drawing the interest of the institutions that have since converted.

Church Connection

GAF Federal Credit Union in Dallas was one. The credit

union, sponsored by GAF Building Materials Group, qualified because it had merged with a church credit union on the poor south side of Dallas, said Sheri Achuff, president of the $1 million-asset institution. The church members make up more, than 50% of its membership.

"We just did it [convert to low-income status] to take advantage of the loans that are available," like the revolving loan fund, she said. "I want to use it to educate myself and my board members."

The other groups are: Alpine Community Credit Union in Alpine; Mount Zion First Baptist Federal Credit Union and SAHA Credit Union in San Antonio; Weslaco Catholic Federal Credit Union in Weslaco; and Houston Municipal Employees Federal Credit Union.

Two other credit unions currently have applications pending, Ms. Martin said.

By the end of 1994, the league hopes to bring 75 credit unions under the status.

In late August the league sent letters to credit unions it believed qualified for low-income status, Ms. Martin said.

The NCUA expects about 100 credit unions to convert to low-income status this year, said Christopher W. Kerecman, executive assistant to Robert Swann, a member of the NCUA board.

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