Removing Barriers Blog

Comments submitted to NCUA on CLF
Posted July 01, 2020 by CUNA Advocacy

Earlier this week, CUNA wrote to the NCUA in support of temporary changes to the Central Liquidity Facility (CLF) and is continuing to pursue additional statutory changes to the CLF with Congress. CUNA submitted its comments on NCUA’s interim final rule making the CLF changes, issued in April in response to the pandemic.

“CUNA supports the termination of membership and updated collateral requirement made in the interim final rules,” the letter reads. “These amendments are regulatory and do not have a sunset provision and will bring the CLF more closely into alignment with requirements of the Federal Reserve to borrow from the Discount Window. These changes also encourage larger credit unions to join the CLF and reduce barriers for all credit unions to join and use CLF.”

The changes CUNA has engaged Congress on include:

  • Authorizing the NCUA to expand the CLF’s borrowing authority from 16 to 25 times the paid in capital;
  • Extend the expanded borrowing authority until at least Dec. 31, 2021; and
  • Make permanent the ability of corporate credit unions to act as agents for credit unions.

NCUA Chairman Rodney Hood has supported making the changes to the CLF permanent, and also called for the NCUA board to receive temporary authority to waive the limit of paid in and unimpaired capital and surplus.

The interim final rule is scheduled to expire December 31st.