ALEXANDRIA, Va. (10/24/13, UPDATED: 11:05 A.M. ET)--A final rule addressing emergency liquidity and contingency funding plans for credit unions has just been approved at today's National Credit Union Administration open board meeting.
Under the final rule, credit unions with less than $50 million in assets would need to maintain a basic written emergency liquidity policy, but would not be required to take further action. All federally insured credit unions with assets of $50 million or more would be required to develop contingency funding plans describing how their credit union would address liquidity shortfalls in emergency situations.
FICUs with assets of $250 million or more would be required to have access to a backup federal liquidity source for emergency situations. That is up from the original proposal of $100 million.
The final rule does not include the Federal Home Loan Banks (FHLB) as an acceptable source of liquidity.
The 12 Federal Home Loan Bank presidents, in their own comment letter, urged the NCUA to add their banks to the agency's list of approved emergency liquidity providers for credit unions.
The Credit Union National Association also strongly supported the use of the home loan banks for liquidity. Without the FHLB, credit unions have two options to ensure a federal liquidity source for emergency situations: Becoming a member of the NCUA's Central Liquidity Facility (CLF) by subscribing to CLF stock or access to the Federal Reserve's discount window.
CUNA did not support the NCUA's proposed emergency liquidity regulations for federally insured credit unions and does not agree that a new rule on liquidity is needed.
Watch News Now for details on another board meeting item, a proposed rule addressing credit union capital planning and stress testing.
Other items on today's open meeting agenda include:
Two requests made under the Federal Credit Union Act are on the closed board meeting agenda.