CLF flexibility necessary for CUs to respond to future emergencies
CUNA supports making permanent Central Liquidity Facility (CLF) provisions first incorporated into the CARES Act, it wrote Monday to the agency. NCUA Chairman Todd Harper has expressed similar support for the permanence, which would require Congressional action.
CUNA submitted comments on NCUA’s Interim Final Rule reflecting CLF enhancements in the Consolidated Appropriations Act (CAA).
Specifically, the CARES Act expanded the borrowing authority of NCUA’s Central Liquidity Facility to 16 times the paid in capital (up from 12 times). The CAA extends this through the end of 2021.
“We agree with Chairman Harper’s position that the CLF provisions first incorporated into the CARES Act should be made permanent. We echo the Chairman’s remark that ‘permanence would provide regulatory certainty during the current crisis and bolster the credit union system’s ability to respond to future emergencies,’” the letter reads. “We believe it is important to ensure such changes are in place prior to any future stress on the industry to avoid scrambling to make such (temporary) changes during a time of crisis.”
CUNA also noted its support of draft legislation discussed by the House Financial Services Committee in a hearing last week, the CFL Enhancement Act. This legislation would make permanent the expanded borrowing authority and make it easier for credit unions to join the CLF through their corporate credit unions.