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ALEXANDRIA, Va.-In written testimony to House and Senate subcommittees, NCUA Chairman Dennis Dollar has requested a $2 million appropriation for the agency’s Community Development Revolving Loan Fund and $1.5 billion borrowing authority for the Central Liquidity Facility for fiscal year 2005. Dollar requested another $2 million of appropriations to the CDRLF for fiscal year 2005. “The CDRLF plays a vital role in the success of Access Across America, which is designed to reach out to underserved communities and create economic empowerment for people from all walks of life,” he explained. “Low-income designated credit unions use the loans to further community development by providing funding for member loan demand, additional member services, and increased credit union capacity to serve members that has resulted in the overall improvement of the financial condition of low-income credit union members.” As of December 31, 2003, the CDRLF had provided 224 loans for $33.9 million to low-income designated credit unions. In 1992, NCUA instituted the technical assistance grants made from the interest generated on the low-interest loans. Since that time, the agency has provided 1,206 grants for $2.8 million. “NCUA views the CDRLF as a resource for incubation monies for low-income designated credit unions to initiate or develop services for members, thereby providing further opportunities to self-fund or obtain more substantial funding,” Dollar wrote. “Low-income designated credit unions use CDRLF loans to further community development efforts by funding member loan demand, provide additional member services, increase capacity to service members and improve the financial condition of low-income credit union members.” The chairman has requested a borrowing authority for the CLF of $1.5 billion since FY 2001. The CLF serves to fill credit union needs in times of tight liquidity. The fund is completely self-sufficient and does not use government funds, but goes through appropriations for its borrowing authority limit. The CLF is statutorily capped at 12 times its subscribed capital stock and surplus. “The CLF provides [the corporate credit union] network with assurance that if temporary liquidity shortages or public confidence issues arise due to external events or internal problems, funds are available to meet abnormal savings outflow.” Dollar explained. “However, CLF assistance is generally a secondary source of funds after the corporate system or other sources of credit have been utilized.” [email protected]

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