NCUA Liquidity and LICU Webinars Available Online
Credit unions that missed the NCUA’s Aug. 14 webinars that addressed the proposed liquidity rule, coming changes to the Central Liquidity Facility and the Low-Income Credit Union eligibility initiative can now listen to audio recordings of the event or review written transcripts online, the NCUA announced Wednesday in a release.
Changes in ownership to the CLF is a topic of interest for credit unions with more than $100 million in assets, because they face NCUA’s proposed liquidity rule that mandates mid- and large-size credit unions establish their own emergency liquidity source. The NCUA proposed only two permitted sources of emergency liquidity: the CLF and the Federal Reserve’s Discount Window.
U.S. Central FCU has owned the majority of subscribed capital stock in the CLF, and has provided access to credit unions. However, when U.S. Central closes in October and redeems that stock, the borrowing capacity of the CLF will drop by 96%, and credit unions will be required to purchase their own CLF stock to retain borrowing access. Corporates can also purchase stock and provide access for member credit unions, but most purchase enough stock so all members can participate.
Credit unions can also meet the proposed liquidity rule requirements by establishing borrowing access through the Fed’s Discount Window; however, the Fed requires additional accounts to gain Discount Window access, such as a transaction account or non-personal time deposits.
CLF President Owen Cole presents the liquidity portion of the webinar program. Office of Small Credit Union Initiatives Director William Myers discusses the recent streamlined process for gaining LICU designation, which was included in President Obama’s drought relief package.
Both the audio recordings and written transcripts are available on NCUA’s website.