ALEXANDRIA, Va. – Credit unions are being reminded they have just two months to prepare for the end of their access to the Central Liquidity Facility (CLF), which will conclude with the closure of U.S. Central.
J. Owen Cole, president of the CLF, which is run by NCUA, said when U.S. Central Bridge Corporate shuts down on Oct. 25, 96% of natural-person credit unions will lose access to the CLF due to the ending of U.S. Central’s Agent relationship with the facility. Instead, Cole noted, NPCUs will have to either join the CLF as Regular Members or through another corporate – with corporate access restricted by new regulations. Currently, 93 NPCUs are members of the CLF.
According to Cole, who spoke during a webinar yesterday, applying for Regular Membership in the CLF is a “fairly simple process,” involving filling out and signing forms found on the NCUA website at www.ncua.gov/Resources/CLF/Pages/default.aspx.
A proposed rule by NCUA includes a three-tiered liquidity risk management requirement. CUs with less than $10 million in assets must have a basic contingency funding plan, while those in the $10-million to $100-million range must have an expanded CFP, and CUs with more than $100 million must have an expanded CFP plus pre-arranged access to an emergency liquidity provider, such as the CLF or the Federal Reserve Discount Window.