WASHINGTON – Funding for two NCUA programs and Treasury's Community Development Financial Institutions Fund received approval from a House Appropriations subcommittee on June 7.
The House Transportation-Treasury Appropriations Subcommittee, which includes independent agencies like NCUA, approved the requested $941,000 appropriation for the Community Development Revolving Loan Fund Program and $1.5 billion borrowing authority for the Central Liquidity Facility. The CDFI, also frequently tapped by credit unions, received a $40 million appropriation.
"The agency has worked closely with the House appropriators and has been working with their Senate counterparts," NCUA Director of Public and Congressional Affairs John McKechnie explained.
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Both CUNA and NAFCU sent letters to the Hill prior to the markup supporting the programs' continued funding.
NAFCU supported setting the Central Liquidity Facility's borrowing authority no lower than $1.5 billion where it has been for the last six years. The amount was originally 12 times the subscribed capital stock and surplus, but got capped at $600 million in 1980, which was actually higher than the total of the formula at the time. Credit unions fought to have that raised to at least $1.5 billion if not eliminate the cap altogether.
"With the continuing uncertainty of world events (including terrorism and natural disasters, such as hurricanes), we believe that it would not be judicious to set the cap at a level below this amount for FY `07," NAFCU President and CEO Fred Becker wrote. "We hope that at some future date the Committee will consider removing this artificial cap in its entirety and allow the CLF to borrow at the level prescribed in the Federal Credit Union Act and authorized for Y2K: up to twelve times the subscribed capital stock and surplus of the facility. We do realize, however, that budget realities may make this impossible today, which is why we urge you to set the cap at no lower than the $1.5 billion level adopted last year."
CUNA had urged that the appropriation for the CDRLF be bumped up to at least $2 million. "The CDRLF plays a vital role in underserved communities by providing loans and technical assistance grants to credit unions, enabling credit unions to enhance their technologies in order to provide increased products and services," CUNA President and CEO Dan Mica wrote. "Additionally, the NCUA covers all administrative expenses for the program, ensuring the appropriated funds are maximized to the fullest extent."
CUNA and NAFCU wrote in favor of $80 million in funding for the CDFI, which it did not receive at the subcommittee level. Placing the program under Commerce's Strengthening America's Communities Initiative as the White House has suggested "would have a severe negative impact," Mica wrote.
"NAFCU understands the need for fiscal responsibility, however, this important program is vital in helping credit unions and other financial institutions revitalize depressed communities," Becker's letter stated. "CDFIs help the economy. The Treasury Department has testified that for every $1 CDFIs receive through a CDFI Fund program, they leverage, on average, $21 in private sector investment. With the rebuilding in the Gulf Coast after last year's hurricanes and today's uncertain world, we do not believe that it is prudent to cut CDFI funding." [email protected]
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