Dear Boards of Directors and Chief Executive Officers:
Letter to Credit Unions, 20-CU-08, Enhancements to the Central Liquidity Facility Membership and Borrowing Authority provided information on changes to the Central Liquidity Facility (CLF) because of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided temporary authority for a corporate credit union to become an agent member of the CLF for a subset of their members.
I am pleased to announce that all eleven corporate credit unions have joined the CLF as agent members effective immediately. As agent members, the corporate credit unions have purchased the CLF capital stock for their member credit unions with assets less than $250 million. Therefore, all credit unions with assets less than $250 million that are members of a corporate credit union (covered credit unions) are now eligible to apply for a loan from the CLF. With this action, the corporate credit unions have extended CLF coverage to more than 3,700 credit unions and increased the CLF’s borrowing capacity by over $13 billion.
I applaud the corporate credit unions for their leadership on this very important issue, and their effective coordination with the CLF staff over the last several weeks to work out all of the details. While this agent network is temporary and sunsets on December 31, 2020, it substantially increases contingent liquidity coverage and capacity within the credit union system. Extending this access to over half of the credit union system provides a vital source of backup liquidity and reflects the cooperative spirit of credit unions.
CLF access for credit unions with less than $250 million in assets that are already direct, regular members of the CLF does not change. In addition, credit unions that have an existing relationship with a corporate credit union will not see a change in their relationship as a result of their corporate credit union becoming an agent member of the CLF.
If your credit union is covered by these new CLF agent members, you should work directly with your corporate credit union to request a CLF loan. Covered credit unions do not need to contact the CLF. Your corporate credit union will serve as the liaison between your credit union and the CLF for any loans requests. If your credit union is a covered credit union, would like to apply for a CLF loan, and is a member of multiple corporate credit unions, please contact those corporate credit unions to determine which one is serving as your liaison to the CLF. Contact information for each corporate credit union is attached to this letter.
I also encourage credit unions that are not covered by an agent member and not a regular member of the CLF to consider the benefits of joining the Facility. If you have questions or would like more information about the CLF, please visit the CLF website or email the CLF staff at CLFmail@ncua.gov.
Rodney E. Hood