WASHINGTON–In follow-up to a letter in which members of the NCUA board asked Congress to extend temporary enhancements to the Central Liquidity Facility (CLF), the Corporate Credit Union Alliance has also sent a letter of its own making a similar request.
As CUToday.info reported, the enhancements to the Central Liquidity Facility (CLF) were contained in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and expire Dec. 31, 2021. The three NCUA board members said making those enhancements permanent would “provide regulatory certainty for federally insured credit unions and bolster the credit union system’s ability to respond to any future emergencies by serving as an essential shock-absorber for credit unions and the National Credit Union Share Insurance Fund.”
Four Requests
Among the enhancements both NCUA and the corporate credit unions are seeking to be made permanent:
- Increasing the CLF’s maximum legal borrowing authority
- Permitting temporary access for corporate credit unions, as agent members, to borrow for their own needs
- Providing greater flexibility and affordability to agent members to join and serve smaller groups of their covered institutions than their entire memberships
- Providing the NCUA board with more clarity and flexibility regarding the loans it can approve by removing the phrase, “the Board shall not approve an application for credit the intent of which is to expand credit union portfolios.”
‘Degree of Stability’
In its letter, the Corporate Credit Union Alliance, an association of 11 credit unions nationally, said it has been working closely with NCUA officials and Central Liquidity Facility staff to assist the CLF as a facilitating agent and to provide operational efficiency with advances, repayments, and collateral management for the credit union system.
“These functions add an important degree of stability to the credit union system, and serve as a prudent, reliable and essential regulatory tool which augments the ability of the federal regulator and credit union industry to act in concert during any future liquidity emergency,” the CCUA wrote. “We respectfully request Congress include this permanent authority in whatever legislation you deem most appropriate. It is particularly important Congress ensures the current enhancements do not expire at the end of this year so the certainty provided by your statutory changes that currently exists does not lapse.”
‘Clearly the Time’
Jeffrey W. Merry, chairman of the CCUA and president and CEO of Nashville, Tenn.-based Volunteer Corporate CU, said in a statement to CUToday.info, “NCUA has done a commendable job in highlighting the importance of permanent CLF enhancements to Congress, and the Corporate Credit Union Alliance continues to be fully supportive of those efforts. Given that Congress is turning their attention to the year-end agenda, now is clearly the time to ratchet up our work. The credit union system and the consumers we serve will benefit from these common-sense changes.”