WASHINGTON - The House Appropriations Committee approved a measure on Wednesday that would increase fivefold, to $3 billion annually, the amount that credit unions may borrow from the federal government's Central Liquidity Facility.
Rep. James T. Walsh, chairman of a key appropriations subcommittee, successfully offered an amendment that would raise the longtime $600 million cap to keep up with the growth of credit unions. It is part of a much larger veterans' housing spending bill that the committee was expected to adopt Wednesday and send soon to the House floor, a committee spokeswoman said.
Credit unions use the fund, which is akin to the Federal Home Loan Bank System for banks and thrifts, to cover overnight liquidity needs, seasonal demands such as heavier withdrawals by members going on summer vacations, or economic downturns. The National Credit Union Administration and trade groups lobbied for the increase because, they said, the current cap was established in 1980 and became outdated as credit union assets rose to $411 billion, from $54 billion.
House Banking Committee Chairman Jim Leach supported increasing the cap, or granting regulators the authority to exceed it in an emergency, in a letter Tuesday to Rep. Walsh. "The case is quite credible that in an emergency a demand for resources could arise beyond the historical $600 million lending cap," Rep. Leach wrote.