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The NCUA Board Thursday unanimously approved two interim final rules (IFR): One extending enhancements made to the Central Liquidity Facility (CLF) and one on asset thresholds pertaining to large credit unions. The board also received a board briefing on the NCUA Guaranteed Note (NGN) and Asset Management Estates (AME) programs.

During the meeting, the board recognized the one-year anniversary of the coronavirus pandemic and Chairman Todd Harper discussed his concerns with economic impact payments (EIPs) not being protected from garnishment, but, given the lack of guardrails provided in the American Rescue Plan Act, Harper urged credit unions to live up to their foundational principles and assist struggling members. NAFCU had called on Congress to pass standalone legislation to provide this protection and has shared with lawmakers and the CFPB how credit unions are working to get members their funds.

IFR: CLF enhancement extension

In a unanimous vote, the board approved the IFR extending CLF enhancements made by the Coronavirus Aid, Relief, and Economic Security (CARES) Act until Dec. 31, 2021, as provided by the Consolidated Appropriations Act of 2021 (CAA). In addition, the IFR extends and clarifies the provisions related to a member withdrawing CLF membership laid out in a previous IFR issued in 2020.

NAFCU voiced support for an extension of the CLF provisions beyond and will continue to advocate for permanent changes to the CLF to provide an important liquidity tool for credit unions.

IFR: Asset thresholds pertaining to large credit unions

In another unanimous vote, the board approved an IFR to provide relief to certain large federally-insured credit unions (FICUs), allowing for additional time to prepare for heightened regulatory and supervisory demands upon reaching $10 billion in assets as a result of unprecedented share growth.

The IFR permits FICUs to use asset data as of March 31, 2020, for the 2021 and 2022 calendar years to determine whether the institution is subject to capital planning and stress testing supervision from the NCUA’s Office of National Examinations and Supervisions (ONES).

NAFCU has previously advocated for this flexibility to provide relief for credit unions and parity with a similar rule from the federal banking regulators. As credit unions have seen a large influx of deposits over the past year resulting from coronavirus-related relief efforts and changes in members' financial habits, NAFCU has flagged concerns for credit unions approaching the $10 billion threshold, at which point the CFPB also has supervisory authorities.

Board briefing: NGN and AME programs

During the board briefing, it was revealed that, across the five AMEs, roughly half of the legacy assets have been liquidated. The final note in the NGN program will mature on June 12 at which time all of the legacy assets secured in the notes may be sold.

In addition, staff indicated that the liquidating agent will make an interim distribution to about 2,000 credit unions on April 30 out of three estates: U.S. Central, Members United, and Southwest. The NCUA stated it will provide updated FAQs regarding the distribution.

NAFCU supports a distribution for all credit unions who invested in the corporate credit unions following the financial crisis.

Stay tuned to NAFCU Today for the latest on the NCUA.