WASHINGTON – NCUA is working with key lawmakers to extend funding for the emergency loan fund, known as the Central Liquidity Facility, which is speeding towards a March 6 expiration date.
That’s when the fund is scheduled to return to its nominal $1.5 billion limit, from the $40.5 billion ceiling that was approved on an emergency basis by Congress in September. Such an occurrence would be problematic for NCUA, which has already committed more than $15 billion in aid through the CLF since then.
"The time period is short, if we want to get this on the omnibus appropriations bill," Ryan Donovan, senior CUNA lobbyist, said yesterday, of plans to attach the CLF measure to measure almost sure to pass by the expiration date.
With Congress out of town this week, both the House and the Senate are going to have less than two weeks to pass a bill that funds the operations of the government and get it to President Obama for his signature, noted Donovan.
The CLF, which went almost unused for a decade, has become the focal point of NCUA efforts to boost troubled credit unions. NCUA is not only using it to provide liquidity loans to natural person credit unions, but also to help prop up corporate credit unions in an indirect way, and to make available low cost funding for credit union mortgage refinance efforts.
An NCUA spokesman said yesterday the agency is working with Congress to extend the higher funding limit for the CLF.
Still to be determined is whether NCUA will support an effort by CUNA and NAFCU to expand the CLF’s powers to allow direct access to corporate credit unions. This would allow NCUA to shift some of the $5 billion cost of the corporate bailout to the CLF, from the National CU Share Insurance Fund. The NCUA spokesman said the NCUA Board is still reviewing the CUNA/NAFCU proposal before deciding whether to endorse it.
"Congress will need to act on the CLF," said Brad Thaler, senior lobbyist for NAFCU. "They will have to pass something by March 5. If they don’t act at all, then the federal government shuts down. With the Democrats in control of both Houses and the government, I don’t think that will happen."
