Sens. Alex Padilla, D-Calif., and Kevin Cramer, R-N.D., introduced legislation Tuesday that would allow credit unions to purchase central liquidity facility (CLF) capital stock for specific members for the next three years. CUNA, the California Credit Union League, and Dakota Credit Union Association coordinated with policymakers on the bill.
CLF flexibility enacted via the CARES Act in 2020 expired at the end of 2022.
“We thank Sens. Padilla and Cramer for taking action to ensure credit unions are able to deal with unexpected liquidity shortfalls,” said CUNA President/CEO Jim Nussle. “Extension of these enhancements will better protect credit unions from liquidity issues now and in the future as our economy faces recession and record inflation.”
“Senator Padilla and other members of Congress who support this crucial legislation realize that extending agent membership in the Central Liquidity Facility is a liquidity lifeline for thousands of credit unions across our nation — especially smaller cooperatives that have a harder time navigating cost-effective funds,” said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues. “The benefits of this type of extension are significant and relevant to credit unions and their member-owners, especially in a time of economic uncertainty, rising interest rates, and inflation. While the Senator’s introduction of this bill shows he understands what our industry needs, it also demonstrates his ongoing strong support for credit unions and their members as we strive to deliver affordable financial services.
“Instead of delaying, we can work to shield credit unions from unforeseen liquidity problems today,” she added.
“Thousands of credit unions lost an emergency liquidity backstop when the CLF flexibility expired at the end of 2022, and we thank Sen. Cramer for taking action to remedy this situation,” said Jeff Olson, president/CEO of Dakota Credit Union Association. “Credit unions and their members need access to capital more than ever, and this is a positive step forward.”