May 24, 2016

NAFCU notes corporate opportunity in call for CLF changes

NAFCU Senior Regulatory Affairs Counsel Michael Emancipator highlighted the association's support for a rule allowing corporate credit unions to have a correspondent relationship with the Central Liquidity Facility, in a letter to NCUA Monday.

Emancipator responded to NCUA's request for comments on the entity, which he noted is an important resource for credit unions.

"NAFCU remains convinced that it is important that a viable and dependable resource such as the CLF exists to offer credit unions liquidity when necessary," Emancipator wrote. "In fact, NAFCU recently expressed such support when the agency finalized its rule allowing corporate credit unions to establish a correspondent relationship with the CLF.

"Under the final rule, corporate credit unions are now enabled to serve as financial correspondents to help service and administer liquidity advances for CLF members, without requiring the credit union to maintain an account at the corporate credit union," he continued. "Now, credit unions have a new opportunity to take advantage of the valuable services that corporate credit unions provide."

Emancipator also noted NAFCU's support for the rule change excluding CLF-related bridge loans from counting against a corporate credit union's aggregate unsecured lending limit to one borrower.

Emancipator urged NCUA to update the CFL's technical provisions and operating circular, which has guidance on CFL membership and advances. He also noted NAFCU's support for legislative fixes to remove the subscription requirement for CLF membership and to permanently remove the CLF borrowing cap.