A bipartisan bill on Capitol Hill would make COVID Pandemic-era enhancements to the National Credit Union Administration’s (NCUA) Central Liquidity Facility (CCLF) permanent. This week, the CLF Enhancement Act was introduced by Sens. Alex Padilla (D-CA) and Kevin Cramer (R-ND) and is supported by the California Credit Union League, Nevada’s Credit Unions, and America’s Credit Unions.
The enhancements are designed to give small credit unions easier access to emergency liquidity through the CLF in a crisis, but they expired at the end of 2021.
They increase the CLF’s maximum legal borrowing authority; permit temporary access for corporate credit unions; provide greater flexibility and affordability to agent members to join; and provide the NCUA Board with more clarity and flexibility regarding the loans it can approve.
“The California Credit Union League thanks Senator Padilla for his leadership, and for supporting the credit union industry. Extending agent membership in the Central Liquidity Facility (CLF) is key to keeping credit unions strong,” said Scott Simpson, CEO of Fuel Solutions. “This flexibility is uniquely helpful to smaller credit unions which may not have the economies of scale to quickly address changing tides in the economy. The solution proposed in Senator Padilla’s bill empowers credit unions to be proactive in addressing any liquidity challenges that may arise.”
America’s Credit Unions President and CEO Jim Nussle wrote Padilla and Cramer in support of the bill on Wednesday.
“When in a potential crisis, access to emergency liquidity can help vulnerable credit unions and communities weather the storm. Credit unions should be able to continue service to members in need and not worry about ceasing operations,” Nussle said. “America’s Credit Unions thanks Senators Padilla and Cramer for leading the effort to make enhancements to the Central Liquidity Facility (CLF) that provide needed flexibility and affordability to smaller credit unions who are at increased risk from economic uncertainty. This legislation will help ensure the stability of the credit union system and expand access to capital when it is needed most.”
With the expiration of temporary CLF enhancements at the end of 2021, thousands of credit unions — especially smaller ones — lost a key source of emergency funding. Credit union leaders are grateful to Padilla and Cramer for their leadership in addressing this issue.
By co-sponsoring legislation, they are helping to give credit unions the tools they need to remain stable and responsive during economic uncertainty. Making these changes permanent will strengthen the entire credit union system, protect members’ finances, and ensure they can get capital when they need it most. This is an important step to protect the financial stability of credit union members across California, Nevada, and the entire nation.
