WASHINGTON—NAFCU and CUNA shared support for H.R. 3958, the Central Liquidity Facility Enhancement Act, which makes the changes to the Central Liquidity Facility (CLF) in section 4016 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) permanent.
The Corporate Credit Union Alliance also offered its feedback (see related story).
The trade associations each sent letters to the House Financial Services Committee.
“The CLF is an important emergency liquidity tool for credit unions, and the recovery from the pandemic will likely extend beyond this year,” wrote NAFCU's Vice President of Legislative Affairs Brad Thaler. “NAFCU believes strong liquidity is vital to ensuring loans to struggling families and small businesses continue to flow within the credit union system and taking this step now will help ensure that National Credit Union Administration has a critical tool to help credit unions the next time financial uncertainty arises.”
The letter concluded by urging the committee to support H.R. 3958 at markup.
CUNA’s Comment
“The CARES Act provisions represent a recognition that existing law does not afford credit unions sufficient access to emergency liquidity during times of crisis. It is inefficient and could prove unsafe to allow the CLF to return to its previous level of borrowing authority and credit union access, which will happen if this legislation is not enacted,” CUNA’s letter reads. “Therefore, CUNA strongly supports H.R. 3958, the Central Liquidity Facility Enhancement Act.”
H.R. 3958 would make the following CARES Act changes (scheduled to expire at the end of 2021) permanent:
- Increasing the CLF’s borrowing authority to 16 times the capital paid in (up from 12 times), meaning that, for every $1 of capital and surplus, the CLF can now borrow $16.
- Making it easier for credit unions to join the CLF through their corporate credit union.
These enhancements were originally set to expire in December 2020 but were extended through the end of 2021 through the Consolidated Appropriations Act of 2021.