ALEXANDRIA, Va. (Nov. 29, 2021) – In a joint letter issued today, the NCUA Board requested that Congress make permanent the enhancements to the Central Liquidity Facility (CLF) contained in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
“These enhancements provide the NCUA with a vital tool to ensure continued liquidity of the credit union system as it responds to the COVID-19 pandemic and beyond,” the joint letter said. “Permanence 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.”
The joint letter to Congress, signed by NCUA Chairman Todd M. Harper, Vice Chairman Kyle S. Hauptman, and Board Member Rodney E. Hood, is available on the NCUA’s website (opens new window).
The CARES Act made four critical amendments to the Central Liquidity Facility’s provisions under the Federal Credit Union Act, including:
- 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; and
- 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.”
These enhancements were extended in the Consolidated Appropriations Act of 2021 and will expire on Dec. 31, unless they are extended again. As of October 2021, 4,107 credit unions or 82 percent of all federally insured credit unions have access to the CLF. Before these provisions, only 283 credit unions were members of CLF as of April 2020.