WASHINGTON - Faced with a pending six-week deadline as of March 9 for the General Accounting Office (GAO) to deliver its report on the Central Liquidity Facility (CLF) to the House Banking Committee, CUNA representatives met with key GAO officials April 30 to offer the trade association's assistance as an informational service and, said CUNA's Vice President of Legislative Affairs John McKechnie, "to try and get a sense of the parameters of the GAO's study." House Banking Committee Chairman Jim Leach (R-Iowa) and Ranking Member John LaFalce (D-N.Y.) in their March 9 letter, asked GAO to evaluate the CLF and the "policy options available to the Committee to ensure adequate liquidity for credit unions in unforeseen emergencies." McKechnie said "there is no doubt" GAO intends to meet the March 9 deadline, either with an oral or written report, even if it means delivering an interim report by the date and then following up with a final report. He added that "the feeling we (CUNA) got" is that the GAO will be looking at the operation, structure and purpose of CLF when doing its study. One thing is for certain though, the GAO will be asking a lot of questions and delving into a lot of sources to write its report. Leach and LaFalce made it clear in their letter to GAO that "there is little Congressional sentiment for eliminating the CLF. However, McKechnie noted, "what the ultimate figure will be nobody knows. The GAO doesn't consider it their mission to issue a figure, that's Congress' responsibility. What we do know is that there will not be one voice determining what the CLF cap should be. Everyone's entered the picture, the House Banking Committee, the (House) Appropriations Committee, the GAO." CUNA's Senior Vice President and Associate General Counsel Mary Dunn said CUNA was very upfront with the GAO and made it clear that "we are not here as a disinterested party, we are here as advocates." Dunn said she is aware of concerns that have been raised by some congressional representatives that CLF not be used as a source of "cheap" funds, as some have described it. For those critical of CLF, including Treasury, Dunn said there is no evidence that supports their arguments that CLF is not necessary. "It's clear that GAO is approaching its task in two phases, a short-term report to the Banking Committee that will review CLF lending for Y2K and a longer-term report about sources of liquidity for credit unions," Dunn explained. She added that she came away from the meeting with GAO confident that the study will demonstrate that CLF is a necessary source of liquidity for credit unions and should be continued. To assure that the CLF is continued and that the cap the House Banking Committee and House Appropriations Committee sets is the maximum borrowing level, CUNA and NAFCU have been working in what NAFCU's Pat Keefe describes as "a cooperative fashion." The two associations have had several conversations on the issue, including one most recently the week of March 13. "NAFCU's and CUNA's goal is to ensure that CLF has the resources available to get its job done," said Keefe. "CUNA and NAFCU have some different ideas on how to accomplish that, but we're all working toward the same ultimate goal." At press time, Reps. Marge Roukema (R-N.J.), chairwoman, and Bruce Vento (D-Minn.), ranking minority member, Subcommittee on Financial Institutions & Consumer Credit, had sent a letter to Reps. Allan Mollohan, ranking member, and James Walsh (R-N.Y.), chairman, Subcommittee on VA, HUD and Independent Agencies requesting "that the $600 million cap not be reinstated on the CLF." They referred to the cap as "static." -
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