WASHINGTON—The Federal Reserve should allow all credit unions—regardless of the source of deposit insurance—access to its Bank Term Funding Program (BTFP), CUNA, the American Association of Credit Union Leagues, and 45 state credit union leagues and Associations wrote to the Federal Reserve.
America’s 106 privately insured credit unions (in 10 states) are excluded from accessing the BTFP under current terms.
The Fed created the BTFP March 12 as a new, temporary facility to make liquidity available for depository institutions.
“The BTFP was created in the wake of the failures of Signature Bank and Silicon Valley Bank. The facility’s purpose is to relieve contagion fear and the pressure that follows for federally insured depository institutions,” the letter reads. “Other non-federally insured depository institutions, like privately insured credit unions, are not necessarily immune from those same pressures. In addition, privately insured credit unions are being penalized by not being able to access the low-cost liquidity provided by the BTFP.”
Additional Arguments
The letter further argues that private deposit insurance is an integral part of the credit unio dual chartering system.
“The dual chartering system provides states and credit unions with a choice of regulator and applicable law. It has been widely recognized that the dual chartering system has successfully served as an incubator for innovative approaches to regulation and administration of financial institutions,” the letter states. “States should be able to retain the right to offer private insurance to their credit unions as an option, always subject to appropriate safety and soundness considerations.”
Feeling the FOMO Fever? CUToday.info Has a Prescription
Are you missing out on the latest news in credit unions? Missing the trends and developments you need to be aware of? We can help. Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
And it’s free!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com