Central Liquidity Facility
Key claim: The NCUA is proposing to make permanent its pandemic-era changes to the Central Liquidity Facility—the emergency lending program for credit unions—while dropping expired provisions and simplifying some membership and capital-stock paperwork.
Abstract
(Proposed Rule · National Credit Union Administration) The NCUA Board (Board) is proposing to adopt as final the revisions to the Central Liquidity Facility (CLF) rule made under two interim final rules (IFRs) published in the Federal Register on April 29, 2020, and March 24, 2021. The proposal would adopt the amendments made by these IFRs and, where appropriate, would remove provisions from the NCUA’s regulations that have lapsed under the terms of the IFRs. The proposal would also remove or modify certain filing requirements and criteria the Board uses to approve CLF members. Finally, the proposal would amend the timing requirements related to pay adjustments to the capital stock subscription, clarify various regulatory provisions, and make necessary conforming edits.
Why this matters
The Central Liquidity Facility is the backstop lender for credit unions, and the pandemic-era flexibilities (notably easier agent-member access) materially expanded which credit unions could tap it in a stress event. Locking those changes in via a final rule — rather than letting them lapse — determines whether the credit union system retains its broader emergency liquidity footprint going forward.