NCUA Board Member Todd M. Harper Statement on the Central Liquidity Facility Interim Final Rule

As Prepared for Delivery on April 16, 2020

Owen and Justin, thank you for your presentation today, as well as everyone who worked on this rulemaking. I appreciate the hard work and speed with which the Central Liquidity Facility, or CLF, interim final rule was crafted by you, along with Myra, Anthony, Larry, and Frank.

The COVID-19 pandemic has created public health and economic risks that impact everyone. During these challenging times, I have focused on mission-critical services aimed at containing these risks and ensuring that credit union members are protected and that the credit union system as a whole remains safe and sound. 

Because credit unions need access to liquidity when other parts of our economy freeze up, I called on the NCUA to seek legislation that enhanced the capacity and powers of the CLF. Congress acted quickly to adopt those temporary enhancements as part of the CARES Act, and I am grateful to each NCUA staff member who worked to make that possible.

The NCUA staff have now acted expeditiously to draft the interim final rule to implement these important reforms. I voted in favor of that rule last week.

These changes will provide the system with a sustainable source of liquidity during the COVID-19 pandemic and the ensuing economic uncertainty that seems likely to continue into 2021. For that reason, I urge all natural person and corporate credit unions that do not already belong to the Central Liquidity Facility to join as soon as possible.

As we work to implement these statutory changes, there are new legislative vehicles currently making their way through Congress to address more COVID-19 related issues. In one of those bills, the NCUA should request that Congress lift or extend the sunset of the CLF amendments contained in the CARES Act. 

The temporary changes made to the Central Liquidity Facility are very helpful, but they may be too short in length because liquidity needs seem likely to hit their highest point next year. As such, I believe that we should make the Central Liquidity Fund provisions in the CARES Act permanent or extend their sunset by at least one year to December 31, 2021. 

As I stated earlier, these important enhancements will provide the system with the necessary liquidity during the COVID-19 pandemic and subsequent economic uncertainty that seems likely to continue into 2021.

Thank you again for your presentation, Owen and Justin. Mr. Chairman, I have no questions and no further comments.