The National Credit Union Administration Board (NCUA) has issued an advance notice of proposed rulemaking (ANPR) regarding how credit unions should maintain access to emergency liquidity. Specifically, NCUA is seeking comments on the scope and requirements of a potential new regulation to require all federally-insured credit unions to have access to backup federal liquidity sources in times of financial emergency and distressed economic circumstances.
The new regulation, if promulgated, would be added to NCUA’s regulation on requirements for share insurance and would apply to both federal and federally-insured state-chartered credit unions. NCUA believes a credit union could demonstrate that it has access to emergency liquidity in one of four ways: 1) becoming a member in good standing of the Central Liquidity Fund (CLF) directly; 2) becoming a member in good standing of CLF through a corporate credit union; 3) obtaining and maintaining demonstrated access to the Federal Reserve Board’s Discount Window; or 4) maintaining a certain percentage of assets in highly liquid Treasury securities. CUNA’s Regulatory Comment Call is available at this link; please submit your comments to CUNA by January 20, 2012. CUNA’s Corporate Credit Union Task Force will also be reviewing the ANPR.