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Central Liquidity Facility (CLF) Access

In early 2020, the National Credit Union Administration (NCUA) enacted changes to the Central Liquidity Facility (CLF) in relation to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CLF is a mixed ownership Government corporation within the NCUA owned by its member credit unions and managed by the NCUA board. The purpose of the CLF is to act as a credit union system contingent liquidity source to improve the general financial stability by providing member credit unions with a federal backstop source of loans to meet their liquidity needs.

These temporary statutory and regulatory changes provided the authority for Corporate Central to become an Agent Member of the CLF for a subset of our members. As a result, all Full Members of Corporate Central under $250 million in assets had access to the CLF for any emergency funding needs arising between that time and the end of 2022. As an Agent Member, Corporate Central had the ability to fund capital requirements and act as a liaison to the CLF to provide services related to the CLF, such as: working with credit unions on required paperwork, managing the collateral pledging and administration process, assessing and submitting liquidity need requests, and facilitating any necessary loan advances.

Unfortunately, the strong and vigorous efforts of Corporate Central, the Corporate Credit Union Alliance, credit union industry trades, and the support of the NCUA board to keep these regulatory changes in place were not successful. Congress failed to reauthorize the enhancements to the CLF agent-member provision, which, as a result, expired at the end of 2022.

The NCUA is now encouraging credit unions to become direct CLF members. For this subset of Full Members of Corporate Central, we can perform the role of Correspondent. With a Correspondent CLF relationship, Corporate Central can assist with paperwork, loan disbursements, payments, and other administrative duties to assist members and the CLF; however, capital funding for a Correspondent CLF relationship would be made directly from the credit union, not by Corporate Central. You can find more information related to the CLF here.

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