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The National Credit Union Administration board is asking Congress to make permanent the pandemic-related changes to the agency’s Central Liquidity Facility.
Those changes are set to expire on Dec. 31.
“These enhancements provide the NCUA with a vital tool to ensure continued liquidity of the credit union system as it responds to the COVID-19 pandemic and beyond,” board Chairman Todd Harper and board members Kyle Hauptman and Rodney Hood wrote in a letter to chairmen and ranking members of the Senate Banking and House Financial Services committees.
The three wrote that permanence would provide regulatory certainty for federally insured credit unions and improve the credit union system’s ability to respond to any future emergencies by serving as a shock-absorber for the NCUA and financial institutions.
The board members asked that four changes be made permanent. Those changes increased the CLF’s borrowing authority; allowed access for corporate credit unions as agent members to borrow for their own needs; provided greater flexibility and affordability to agent members to join and serve small groups of credit unions; and provided the NCUA board with more flexibility regarding the loans the agency may approve from the CLF.
The board members said that as a result of the changes, 4,107 credit unions have access to the CLF, up from 283 in April 2020.
The three board members said that if lawmakers are not willing to make the changes permanent, they would like the House and Senate to extend the provision for at least an additional year to provide continued stability during the response to the pandemic.