WASHINGTON–A coalition of corporate credit unions has expressed support for the recently proposed NCUA Central Liquidity Facility Enhancements Act, and offered its suggestion for making it “even better.”
As the CU Daily reported here, the bipartisan bill introduced by Sens. Alex Padilla (D-CA) and Kevin Cramer (R-ND). The legislation seeks to permanently restore key provisions that expand credit union access to the NCUA’s Central Liquidity Facility, which serves as an emergency liquidity backstop.
In its letter to the Senate, the Corporate Credit Union Alliance (CCUA), which represents 11 corporate credit unions, said it is supportive of efforts to modernize the Central Liquidity Facility (CLF), and is particularly supportive of NCUA’s requests to Congress for statutory changes that would allow corporate credit unions, as agents, to buy the CLF capital stock required for membership for a subset of their members versus their entire membership.
‘More Affordable and Efficient’
“This makes membership more affordable and efficient for the over 2,900 credit unions under $250 million that do not have immediate and ready access to emergency liquidity through the CLF,” the CCUA wrote. “Additionally, statutory changes that would allow corporate credit unions to directly borrow from the CLF for their own needs would also support the overall liquidity position of the credit union industry given the important role that corporate credit unions play in providing liquidity to credit unions across the nation.”
The corporate credit union letter states several times that the need for strong and dependable liquidity sources for all segments of the financial services sector is “widely recognized.”
“Your draft Bill is an excellent step forward in modernizing the CLF; however, it could be made even stronger by also allowing the eleven corporate credit unions to access the CLF if needed,” the letter to the senators states. “We have respectfully included suggested redlined edits to Subchapter III – Central Liquidity Facility that would accomplish this.”
The letter was signed by Melissa Ashley, president and CEO of Corporate One FCU and chair of the Corporate CU Alliance.
From Paper Tiger to Active Player
“LaCorp was an agent member of the CLF last time the opportunity to serve was made available, and we stand ready to do it again,” Louisiana Corporate CU CEO David Savoie said in a statement. “This legislation would be a start, but the CLF needs a lot more modernization and resources to go from being a paper tiger to active player in credit union liquidity.”
