Although the NCUA has said it does not consider Federal Home Loan Banks to be appropriate sources of emergency liquidity, Director of Examination and Insurance Larry Fazio suggested Tuesday that the regulator may have had a change of heart.

“We do think (FHLBs) are a good source of contingency funding, a credit market source for credit unions,” Fazio said in response to a question during an NCUA webinar that also featured Consumer Financial Protection Bureau Director Richard Cordray.

Fazio continued, “The issue that usually comes up is whether or not we view them as a federal emergency liquidity backstop, and that’s one of the things we’re still discussing.”

Fazio’s comment follows a Jan. 31 letter signed by all 12 FHLB presidents, urging the NCUA to include the banks as an emergency liquidity option in its final rule on the subject.

The NCUA’s proposed rule requires credit unions with more than $100 million in assets to establish a relationship with either the NCUA’s Central Liquidity Facility or the Federal Reserve’s Discount Window to provide emergency liquidity in a systemic liquidity crunch.

When introducing the proposed rule last year, the NCUA said that FHLBs are not appropriate sources of emergency liquidity because they are “private institutions which are not obligated, and may not be able, to meet emergency liquidity demands in the same way the Discount Window and CLF are statutorily designed to do.”