NCUA's Central Liquidity Facility passes $25B in borrowing authority
The Central Liquidity Facility marked a milestone Monday as its borrowing capacity surpassed $25 billion.
The CLF had 297 members at the end of May, according to data from the National Credit Union Administration, up from 283 members in April. However an announcement in May that all 11 corporate credit unions had joined the CLF as agent members helped boost participation, to the point that 73% of all federally insured credit unions now have access to the facility, according to NCUA.
Regulatory changes made by the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act for short, incentivized more credit unions to join the CLF by adjusting membership provisions and eliminating new member waiting periods. The temporary borrowing authority granted by the CARES Act allows CLF members to borrow up to 16 times its total capital.
“The growth in the number of CLF’s members and its borrowing authority is a testament to our nation’s credit unions coming together in a time of crisis to strengthen the national system of cooperative credit,” NCUA Chairman Rodney Hood said in a press release Monday.
The CLF's agent network sunsets at the end of the year, however, and some members of the NCUA board have called for those provisions to be extended until at least the end of 2021.
Amid a pandemic and recession, added Hood, "having a reinforced CLF will ensure the credit union system can continue to support its members and communities should the need for contingent liquidity arise."