National Credit Union Administration's (NCUA) July Board meeting will have a weighty agenda, particularly compared to previous months such as June when there was no open board meeting. NCUA has not released the official agenda yet (the agency is required by law to publish the agenda a week before the meeting).
However, agency officials have let us know that the agenda should include continuation of the 18% usury ceiling, the Temporary Corporate Credit Union Stabilization Fund assessment (which will be in the range of 8-11 basis points) as well as a possible proposal on emergency liquidity. The proposal follows the advanced notice of proposed rulemaking that NCUA issued in December; the comment period closed in February.
Credit Union National Association (CUNA) has formed a Liquidity Task Force, chaired by Terry West, CEO of VyStar Credit Union, to look into various issues associated with sources of emergency liquidity for credit unions, including the future of the NCUA’s Central Liquidity Facility (CLF). Currently, only about 100 credit unions are direct members of the CLF and can access it for liquidity needs. With the extinguishment of the US Central Bridge, which had sponsored membership in the CLF for a number of credit unions, slated for this fall, the capitalization and role of the CLF are issues the Task Force will be considering.
In the past, the CLF has not been widely used by credit unions, although NCUA did draw on its resources as it dealt with corporate credit union issues in 2009. CUNA’s comment letter on the ANPR noted the past role of the CLF but also strongly supported the use of alternatives, such as the Federal Home Loan Banks, as options for access to liquidity for credit unions. The agency will also consider mid-year adjustments to its budget. Last July, NCUA adjusted its operating budget downward by $2 million and we are urging the agency to take similar steps this year and contain costs as much as possible.