The Central Liquidity Facility (CLF) Fairness Act (H.R. 3958) would better protect credit unions from unexpected liquidity issues now and in the future, CUNA wrote prior to the House Financial Services Committee’s markup of the bill. Last year’s CARES Act made several enhancements to the CLF, which H.R. 3958 would make permanent.

“The CARES Act provisions represent a recognition that existing law does not afford credit unions sufficient access to emergency liquidity during times of crisis. It is inefficient and could prove unsafe to allow the CLF to return to its previous level of borrowing authority and credit union access, which will happen if this legislation is not enacted,” the letter reads. “Therefore, CUNA strongly supports H.R. 3958, the Central Liquidity Facility Enhancement Act.”

H.R. 3958 would make the following CARES Act changes (scheduled to expire at the end of 2021) permanent:

• Increasing the CLF’s borrowing authority to 16 times the capital paid in (up from 12 times), meaning that, for every $1 of capital and surplus, the CLF can now borrow $16.
• Making it easier for credit unions to join the CLF through their corporate credit union.

These enhancements were originally set to expire in December 2020 but were extended through the end of 2021 through the Consolidated Appropriations Act of 2021.