Coronavirus and Liquidity Planning

The Texas Credit Union Department in its March Newsletter is encouraging credit unions to review their liquidity outlook, asset liability management practices and Liquidity Contingency Funding Plan to ensure that they have adequate liquidity to meet member loan demand and share withdrawal requests.

The regulator wrote that "[a] number of your members will likely need lending assistance or will be making savings withdrawals to get thru these challenging times."

As part of the credit union's Contingent Funding Plan, each credit union should address:

• its policies to manage a range of stress environments, identification of some possible stress events, and identification of likely liquidity responses to such events;
• its lines of responsibility within the credit union to respond to liquidity events;
• its management processes that include clear implementation and escalation procedures for liquidity events;
• its outside sources of liquidity for contingency needs; and
• the frequency the credit union will test and update the plan.