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CLF NCUA consider shifting USC stock ownership
ALEXANDRIA, Va. (8/12/09)--The National Credit Union Administration (NCUA) board and the Central Liquidity Facility (CLF) board will consider shifting stock ownership from U.S. Central to other individual natural person credit unions or "agent groups" of credit unions via sales of shares, said CLF President Owen Cole in an NCUA webcast Monday. This transfer is one of many options that the boards could consider in the coming months, and Cole said that they could present a proposal for public comment “for the industry to consider.” The NCUA recently announced the transfer of accounts holding $1.8 billion of CLF funds from U.S. Central FCU to the U.S. Treasury and said that it is exploring "alternatives" regarding the transfer of primary ownership of CLF stock to other credit unions or groups of credit unions "through the anticipated reforms to the corporate network." During the webcast, Cole said that the transfer from U.S. Central was related to accounting issues. The NCUA in a recent release said that the change resulted from the CLF's consultations with its auditor, and sources have indicated that the Treasury favored this change. According to the NCUA release, the CLF fund transfer was due to an auditor determination that U.S. Central’s role as both an investor in the CLF and as the agent holding the CLF's funds, including the cash resulting from its own investments in CLF stock, could have resulted in some assets being double counted. Cole said that the CLF has proven to effectively maintain liquidity throughout the credit union system. Cole also touted the benefits of investing in the CLF through direct means or through agents, adding that natural-person credit unions should continue to support the CLF’s ability to provide liquidity by including the CLF as part of their total investment plan.


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