Proposed NCUA CLF Changes: Credit Union Input Requested
The National Credit Union Administration (NCUA) is preparing to unveil several significant changes to the Central Liquidity Facility (CLF). These changes will have an impact on both natural person and corporate credit unions.
NCUA will issue FAQs later this month that describe the changes contemplated for CLF, as a result of the demise of US Central.
Credit unions are asked to weigh in on access to emergency liquidity. NCUA has released an advanced notice of proposed rulemaking (ANPR) on "Access to Emergency Liquidity" that highlights this issue, asking credit unions a series of questions about their preference for how they would reconstitute their emergency liquidity capability, either through a renewed relationship with CLF or some other means. Click here to see more information. Comments on the ANPR are due February 21, 2012.
Currently, U.S. Central Bridge Corporate Federal Credit Union (USC Bridge) holds most of the issued CLF capital stock. They hold it on behalf of the credit unions belonging to the corporates in their agent group. The wind down and closure of USC Bridge effectively means credit unions have the option to acquire a pro rata share of the stock currently held by USC Bridge if they want to maintain access to emergency liquidity from CLF. For financial reasons, this must occur in 2012.
One option under active consideration by the NCUA Board would be to allow corporate credit unions to directly access CLF funding--currently, only natural person credit unions are permitted to draw from CLF, either directly or through a corporate acting as an Agent.