ALEXANDRIA, Va. – NCUA said the initial offering of the CU System Investment Program, aimed at pumping new liquidity into a handful of corporate credit unions, will result in $4.9 billion being provided to two corporates, U.S. Central FCU and WesCorp FCU, this Friday.
Under the program, the funds must be used to replace external borrowings from sources like the Federal Home Loan Banks, the Federal Reserve or commercial paper investors. U.S. Central and WesCorp currently have the largest amounts among the corporates of external borrowings, that is, from sources outside the credit union movement.
The initial offering is almost ten-times what NCUA originally planned, indicating the popularity of the program. It will allow natural person credit unions to borrow funds from the Central Liquidity Facility at 1.25%, with the condition that those funds are invested in so-called SIP notes with one of the corporates at 1.50%.
Separately, NCUA said its CU HARP–for Homeowners Affordability Relief Program–appears to be less popular than hoped for. NCUA, which hopes to provide as much as $4 billion in low-cost CLF loans so credit unions can refinance at-risk mortgages, received only $164 million in requests for the 1.25% loans.
