Friday, August 13, 2010

CLF Should Be Subject to Same Transparency Reporting Requirements as Fed's Discount Window

The National Credit Union Administration’s Central Liquidity Facility (CLF) should be subject to the same transparency reporting requirements that applies to the Federal Reserve as dictated by Section 1103 of the Dodd Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111-203).

Section 1103 requires the Federal Reserve to disclose in timely manner information concerning the borrowers and counterparties participating in emergency credit facilities, discount window lending programs, and open market operations.

For discount window loans extended on or after July 21, 2010, the Federal Reserve will publicly disclose the following information, generally about two years after a discount window loan is extended to a depository institution:

• The name and identifying details of the depository institution;
• The amount borrowed by the depository institution;
• The interest rate paid by the depository institution; and
• Information identifying the types and amounts of collateral pledged in connection with any discount window loan.

The CLF was established in 1978 to provide emergency liquidity to credit unions and receives an annual appropriation from Congress. Since the CLF performs the same function of providing temporary liquidity as the Federal Reserve’s discount window, the CLF should be subject to the same disclosure requirements as mandated by Section 1103 of the Dodd Frank Act.

Also, any emergency credit facility, such as the Temporary Corporate Credit Union Stabilization Fund, should be subject to this disclosure requirement. NCUA disclosed that on June 14 the Stabilization Fund borrowed $810 million from the Treasury and these borrowings were to be deposited into corporate credit unions this summer, in order to raise liquidity within the corporate credit union system.

While the Dodd Frank Act does not require NCUA to disclose the name of credit unions borrowing from the CLF or other lending facilities, the agency should voluntarily comply with the requirements of Section 1103 of the Dodd Frank Act. Doing so would show the public that NCUA is serious about transparency and complying with the spirit of the law.


  1. "The spirit of the law." Please!!!!! If the "spirit of the law" was important then the ABA would never had sued the NCUA over field of membership resuling in the 1998 Supreme Court Decision which led to the Credit Umion Membership Access Act of 1998 which foisted the bogus 12.25% MBL asset cap. If "spirit of the law" were used, then the Federal Reserve could eliminate the anti-consumer provisions of Regulation D which limits most electronic transfers between savings accounts and transaction accounts to six. Sorry, the law is the law. If it ain't there, it doesn't exist.

  2. I guess that is something that will need to be fixed.

  3. Hahaha, Disclosure of Fed borrowings?!

    This sounds like something YOU need (or want) only to make YOUR credit union-basing job easier.

    Let’s review the facts. The Fed has refused to name the banks, or amounts that it lent more than $3.7 trillion to during the past few years, or disclose what over-discounted assets it accepted as make-believe collateral under 11 recent programs, most put in place during YOUR banker-caused worst financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle financial markets. ABA backed that position.

    So YOU want what? Why? Hahaha

    Remember you all lost in US District Court. But disobediently, the data is still not released. Even voluntarily.

    Still hiding facts that failing and semi-solvent banks repaid TARP with obligations carrying a 5%-9% implied cost via Fed borrowings at 20bp? Wink wink; you guys almost got away with a good one. Tricking those stupid taxpayers again.

    Now let’s blame the NCUA’s CLF for not adapting policies to make YOUR job easy.

  4. Here's a law that does exist and it has nothing to do with spirit.
    The ncua charter change rules should be no more or less restrictive than other regulator's charter change rules.
    so why has ncua been allowed to pile on pages of costly,unneccesary and meddlesome rules?



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.