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NCUA's interim final rule on CLF provides flexible access for CUs
Earlier this month, the NCUA issued an interim final rule to enhance credit unions' ability to access and use the Central Liquidity Facility (CLF), codifying temporary changes made by the CARES Act and adopting other, non-expiring improvements. NAFCU sent members a Final Regulation Alert yesterday highlighting the changes and providing a breakdown of how the rule impacts credit unions.
The rule makes it easier for credit unions to join the facility as a regular member or through a corporate credit union as part of an agent relationship, and access emergency liquidity should the need arise. It specifically:
- eliminates the six-month waiting period for a new member to receive a loan;
- temporarily shortens the waiting period for a credit union to terminate its membership;
- eases collateral requirements on some assets; and
- allows, temporarily, for an agent member to borrow for its own liquidity needs.
The interim final rule will become effective once published in the Federal Register. Most provisions will expire Dec. 31, 2020.
The NCUA previously offered insights into accessing the CLF in its coronavirus FAQs and received a briefing on the facility during this month's board meeting.