Thursday, November 29, 2012

No Corporate CUs Participating in CLF as of October

The October financial report for the Central Liquidity Facility (CLF) shows that no corporate credit unions have stepped up to act as agent members, despite the efforts of the NCUA Board.

The NCUA Board tried to encourage corporate credit union participation in the CLF by modifying the definition of net assets for calculating the leverage ratio to “total assets less CLF stock subscriptions, loans guaranteed by the NCUSIF, and member reverse repurchase transactions.”

However, most, if not all, corporate credit unions cannot afford to purchase CLF stock as an agent for their members. A corporate credit union acting as an agent for its members must subscribe to CLF capital stock in an amount equal to 0.5 percent of its paid-in and unimpaired capital and surplus of its members.

As a result, the borrowing capacity of the CLF has dramatically fallen with the redemption of U.S. Central Bridge FCU's CLF stock.

View the report.
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