ALEXANDRIA, Va. (Dec. 22, 2022) – National Credit Union Administration Chairman Todd M. Harper today released the following statement on funding for the NCUA’s Community Development Revolving Loan Fund (CDRLF) grants, the Central Liquidity Facility (CLF) agent-member provision, and vendor authority:
“I want to thank lawmakers for coming to an agreement to more than double the funds available for NCUA’s Community Development Revolving Loan Fund grants in fiscal year 2023 as part of the Omnibus Appropriations package.
“If these additional appropriations—now at $3.5 million—are approved in the days ahead, the NCUA will be able to make more grants and bigger grants to eligible low-income credit unions for efforts like advancing Minority Depository Institutions mentoring and preservation, supporting increased access to affordable financial products and services in underserved areas, closing the racial wealth gap, and enhancing cybersecurity. That is very good news.
“However, I am also frustrated with the failure of Congress to heed the NCUA Board’s calls to reauthorize the enhancements to the Central Liquidity Facility agent-member provision that come at zero cost to the taxpayer. That failure to act will now trigger the loss of $10 billion (with a B) in emergency liquidity for the smallest credit unions just as we face growing economic uncertainty, a high interest rate environment, and rising liquidity concerns. When a liquidity crisis hits, it’s better to have a reliable shock absorber in place than it is to rely on a hope and prayer that the problem will somehow work itself out.
“Likewise, Congress also chose to reject additional protections for our national economic security by failing to provide the NCUA with the legal authority—the exact same authority that other federal banking regulators have to examine service providers for their regulated institutions—to examine contracted service providers who perform vital functions that have nearly $2 trillion (with a T) flowing through their unregulated information technology systems and operating practices.
“It’s long past time to close this growing regulatory blind spot for the roughly one-third of all Americans who have placed their trust and hard-earned savings in federally insured credit unions. Again, I ask, ‘ This is an external link to a website belonging to another federal agency, private organization, or commercial entity. Why should bank customers have better cybersecurity protection than credit union members (Opens new window) ?’
“Nevertheless, I remain deeply committed to enhancing the strength of the credit union system and advancing economic equity. I will therefore continue pressing Congress during my time on the NCUA Board to care more about these vital requests for the NCUA and the credit union members we protect, and I certainly hope I will not be put into the position to say ‘I told you so’ in the coming years.”