The Federal Reserve should allow all credit unions—regardless of the source of deposit insurance—access to its Bank Term Funding Program (BTFP), CUNA, the American Association of Credit Union Leagues, and 45 state credit union Leagues and Associations wrote to the Federal Reserve Wednesday. America’s 106 privately insured credit unions (in 10 states) are excluded from accessing the BTFP under current terms.

The Fed created the BTFP March 12 as a new, temporary facility to make liquidity available for depository institutions.

“The BTFP was created in the wake of the failures of Signature Bank and Silicon Valley Bank. The facility’s purpose is to relieve contagion fear and the pressure that follows for federally insured depository institutions,” the letter reads. “Other non-federally insured depository institutions, like privately insured credit unions, are not necessarily immune from those same pressures. In addition, privately insured credit unions are being penalized by not being able to access the low-cost liquidity provided by the BTFP.”

The letter adds that private deposit insurance is an integral part of the credit unio dual chartering system.

“The dual chartering system provides states and credit unions with a choice of regulator and applicable law. It has been widely recognized that the dual chartering system has successfully served as an incubator for innovative approaches to regulation and administration of financial institutions,” it reads. “States should be able to retain the right to offer private insurance to their credit unions as an option, always subject to appropriate safety and soundness considerations.”