Amid Cuts, Revolving Loan Fund Gets A Boost
Among the more interesting things, from a credit union perspective, in President Bush's 2006 budget proposal introduced last week, is the addition of still more funding for NCUA's Community Development Revolving Loan Fund, even while dozens of programs are slated for cutbacks. The fund went almost 20 years since its 1979 inception without any new funding. During that time it was NCUA policy not to ask for any new funding for the program. But over the past eight years new appropriations requested by NCUA have more than doubled the fund's size to $19 million.
The Bush budget proposal would include another $950,000 appropriation, just $50,000 less than NCUA requested, for the loan fund's small technical assistance grants. That money would be dedicated solely for the T&A grants and would not be used for new loans. Of course, there is almost $7 million of money in the fund that NCUA has been unable to loan out because of slack demand.
The Bush budget would also renew the borrowing limit for the Central Liquidity Facility, the emergency loan fund administered by NCUA, at $1.5 billion. Since the expansion of the corporate credit union network the CLF has been virtually ignored as a liquidity source, with fewer than a half dozen loans made over the past decade.