WASHINGTON — The Defense Credit Union Council is urging the U.S. Senate to adopt an amendment that would restore and modernize the credit union system’s emergency liquidity backstop as lawmakers consider housing legislation.
In a letter to Sens. Alex Padilla and Kevin Cramer, DCUC said it strongly supports including the NCUA Central Liquidity Facility Enhancement Act in the Senate’s deliberations on the Housing for the 21st Century Act.
The organization said the amendment would strengthen the National Credit Union Administration’s Central Liquidity Facility, which it described as a critical backstop for credit unions during times of economic stress.
According to DCUC, the facility serves as the credit union system’s lender of last resort, providing emergency liquidity to institutions facing unexpected financial pressures. For many defense-focused credit unions located on military bases or in rural communities, it is the only dependable federal liquidity source available during a crisis, the organization said.
‘Increased Participation’
DCUC said Congress temporarily expanded access to the facility during the COVID-19 pandemic by allowing corporate credit unions to participate as agent members on behalf of smaller institutions. Those changes increased participation from only a few hundred credit unions to more than 4,000 nationwide, giving smaller institutions access to emergency liquidity when needed most, according to DCUC.
But when those provisions expired at the end of 2022, thousands of credit unions — including many serving military communities — lost access to the liquidity safeguard, the organization said. Restoring those authorities permanently would strengthen the resilience of the credit union system and would not require taxpayer funding because the facility is financed by credit unions themselves, DCUC added.
Earlier Support
The Defense Council also said it had previously supported efforts to include similar reforms in the Senate version of the fiscal 2026 National Defense Authorization Act, where the proposal initially received bipartisan support before being removed during conference negotiations.
DCUC said the Padilla-Cramer amendment provides another opportunity for Congress to ensure credit unions remain prepared to serve communities during periods of economic stress.
For credit unions serving military installations, the issue goes beyond balance sheets, the organization said. Reliable liquidity support helps ensure servicemembers and their families can continue accessing emergency loans, mortgages and other financial services during challenging periods, according to the letter.
“Simply put, strengthening the CLF ensures credit unions can continue to ‘keep the lights on’ for their members during times of crisis,” DCUC wrote, urging the Senate to adopt the amendment as part of the housing legislation.
