WASHINGTON - Earlier reports that NCUA was granted the authority to determine if an emergency situation warrants raising the Central Liquidity Facility cap higher than the proposed $3 billion ceiling are false, says the agency, and the root of the confusion traces back to early information out of House Banking Committee Chairman Jim Leach's (R-Iowa) office. Last minute lobbying by NCUA and credit union trade associations succeeded in convincing a House Appropriations Committee to pass an amendment June 7 raising the CLF cap to $3 billion (CU Times, June 14), which is well over the $600 million level a House Appropriations Subcommittee and the House Banking Committee, the House VA-HUD and Independent Agencies Subcommittee had recommended the week before (CU Times, May 31). A provision in the amendment allegedly gave NCUA the authority to determine if the cap should be lifted higher than $3 billion in an emergency situation, but Bob Loftus, director of public and congressional affairs for NCUA said "there was never such a provision." Loftus explained that Leach had initially recommended the House Appropriations Committee set a cap for the CLF and include a special provision that would have allowed the Secretary of Treasury to determine whether a situation qualified as an emergency and to raise the cap further. Loftus stressed that "Leach did not specify what that cap should be" and there is essentially no way to know if he had in mind for it to be higher or lower than $3 billion. "However, we can assume he preferred it to be $3 billion because he left it for (congressman) James Walsh (R-N.Y.) to determine." Walsh is chair of the VA-HUD and Independent Agencies Subcommittee. NCUA objected to the Secretary of Treasury's role in deciding the CLF cap, because the Treasury had been very vocal about not seeing any importance of CLF and urged it be discontinued. The trade associations, leagues and corporate CUs also objected to Treasury's involvement and they walked the halls on Capitol Hill to advocate their position. Walsh subsequently proposed the amendment that ultimately raised the CLF cap to $3 billion. "NCUA always felt the CLF cap should be $3 billion and we are very pleased that is what Rep. Walsh recommended," said Loftus. -
ekingoff@cutimes.com
