ALEXANDRIA, Va.-NCUA announced it is pulling the funds for the Central Liquidity Facility, the industry's $40-billion emergency loan fund, from deposits at troubled U.S. Central FCU and will invest them instead in U.S. Treasury securities.
The CLF, which has become the lifeline for CUs through the financial crisis, is a unique entity owned by U.S. Central, but managed by NCUA-as a so-called government sponsored enterprise. Since the failure of U.S. Central the dividend has been paltry, if in doubt. For the first quarter, the CLF paid a 1.3% dividend, down from 5.1% for the first quarter last year. The second quarter dividend is expected to be even less, or non-existent. NCUA said it is exploring options for transferring the primary ownership of the CLF from U.S. Central to other credit unions or groups of credit unions as part of the reform of the corporate network.
