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Central Liquidity Facility (CLF) Access

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 now have access to the CLF for any emergency funding needs that may arise for your credit union between now and the end of 2020. As an Agent Member, we will be your liaison to the CLF to provide services related to the CLF, such as: working with you on required paperwork, managing the collateral pledging and administration process, assessing and submitting liquidity need requests, and facilitating any necessary loan advances.

The NCUA is encouraging credit unions over $250 million to become direct CLF members. For this subset of Full Members of Corporate Central over $250 million in assets, Corporate Central 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.

To prepare your credit union to become an Agent Member of the CLF, please review the Liquidity Need Loan Application, then complete, sign, and return to Corporate Central. The document allows for electronic signature, which is the preferred method. While there is not a requirement for this document to be on file until you have a need to access the CLF, we strongly recommend that you get the document on file now to allow for expedited access to the CLF if or when you need it.

The changes allowing Corporate Central to be an Agent Member of the CLF are temporary and currently set to expire on December 31, 2020. While the NCUA has indicated its desire to extend the expiration of these changes, or even make them permanent, it is still unknown if or when that may occur.

Learn more about the CLF here. If you have any questions, please feel free to contact us.

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