The number of credit unions eligible for funding from the National Credit Union Administration’s Central Liquidity Facility just got a lot bigger.
The regulator announced Monday that all 11 corporate credit unions have become agent members of the CLF, granting borrowing ability to any credit union holding less than $250 million in assets as long as they are a member of a corporate.
The CARES Act opened up CLF membership to corporates and subsequent NCUA rulemaking reduced the waiting time for new members to receive loans. Many small and mid-size CUs rely on corporates for additional liquidity but are not required to. Those $250 million and above are required to have a liquidity backstop in place.
The liquidity facility's borrowing authority increased by over $13 billion with the corporate addition and now covers more than 3,700 credit unions. There were 5,236 credit unions operating at the end of 2019 per the NCUA's 2019 annual report.
For loan requests, corporate credit unions act as a liaison between credit unions and the CLF. Credit unions interested in applying for a CLF loan should work with their corporate credit union accordingly to tap into additional liquidity, Hood advised.
“While this agent network is temporary and sunsets on December 31, 2020, it substantially increases contingent liquidity coverage and capacity within the credit union system,” Hood wrote. “Extending this access to over half of the credit union system provides a vital source of backup liquidity and reflects the cooperative spirit of credit unions.”
