Urging them to include a provision extending through the end of the fiscal year the Central Liquidity Facility (CLF) loan cap of $41 billion, CUNA has written to the leaders of the House Appropriations Committee and the financial institutions subcommittee of that panel.

The loan cap was raised to its statutory ceiling of $41 billion on a temporary basis (until March 6) in a provision signed into law by President Bush last year, CUNA President and CEO Dan Mica wrote to Committee Chairman David Obey (D-Wis.) and Ranking Member Jerry Lewis (R-Calif.), as well as subpanel Chairman Jose Serrano (D-N.Y.) and Ranking Member Jo Ann Emerson (R-Mo.). “Increasing the CLF cap to its statutory ceiling was a prudent measure to prevent any credit union liquidity problems during this ongoing period of turmoil in the financial sector and the credit markets,” he stated.

However, Mica wrote, the cap must be maintained at that level at least until the end of this fiscal year (Sept. 30). “These are extraordinary circumstances: NCUA should have every tool at its disposal to address the effect of the financial crisis on the credit union system,” Mica wrote.

The complete text of the letters to the chairmen and ranking members follows:

Feb. 20, 2009

Dear Chairman and Ranking Member:

On behalf of the Credit Union National Association (CUNA), I am writing in support of the National Credit Union Administration’s (NCUA) request to extend the current loan ceiling for the Central Liquidity Facility (CLF) through the end of fiscal year 2009. CUNA represents approximately 90% of America’s 8,200 state and federally chartered credit unions and their 90 million members.

As you know, on September 20, 2008, President Bush signed legislation to fund operations of the federal government through March 6, 2009. Included in the law was a provision that increased the loan limitation for the CLF to its statutory cap of $41 billion (through March 6, 2009). Increasing the CLF cap to its statutory ceiling was a prudent measure to prevent any credit union liquidity problems during this ongoing period of turmoil in the financial sector and the credit markets.

As you debate omnibus appropriations legislation to fund federal government operations through the end of this fiscal year, I respectfully ask you to include a provision extending the CLF loan limitation statutory cap of $41 billion through September 30, 2009. This action merely provides the NCUA with the tools it needs should unexpected problems arise within the credit union movement. In addition, extending the authority of NCUA to tap the CLF up to its statutory cap will further bolster public confidence in the credit union system. Failure to extend this provision would result in the CLF loan ceiling reverting to its traditional $1.5 billion loan cap.

These are extraordinary circumstances: NCUA should have every tool at its disposal to address the effect of the financial crisis on the credit union system. On behalf of the Credit Union National Association, we appreciate your leadership in this area and we look forward to working with you on this issue.

Sincerely,

Dan Mica

President & CEO

Credit Union Natl. Assn.

Washington, DC