As Prepared for Delivery on December 14, 2023
The NCUA Board, in its capacity as the CLF Board, must approve the CLF’s budget. In previous years, the CLF’s expenditures were accounted for within the NCUA Operating Budget. I believe we can thank Rodney Hood for suggesting a greater focus on and commitment to the CLF. There will come a day when the CLF is essential to credit unions’ survival, much as it was fifteen years ago in the financial crisis.
Today’s discussion reflects the recent Board decision to elevate the importance and awareness of the CLF by fully separating it into a distinct entity with its own president and staff. Prior to this, the CLF had a part-time president with other responsibilities within the agency.
The 2023 budget reflected the addition of dedicated full-time CLF staff. As was just noted in the presentation, the 2024 budget is $2.2 million and represents a decrease of 2 percent or $35,557 from the 2023 budget. It’s always nice to see budgets that are respectful of the folks paying the bills.
We continue to suggest that Congress consider reauthorizing the agent membership issue in the Federal Credit Union Act so that corporate credit unions are again able to join the CLF on behalf of a subset of their members.
Prior to the CARES Act, the CLF had just 270 members. Through the enhanced provisions in the CARES Act, this grew to 3,990 credit unions, thus allowing the vast majority of credit unions to access emergency liquidity. Following the expiration of the provisions, membership fell dramatically to just 350 credit unions. Just over 90 percent of credit unions had assets less than $250 million lost access to the CLF.
Fortunately, the number of credit unions with direct membership in the CLF since the beginning of the year has steadily grown to 402 today. I want to commend Anthony Cappetta and his staff for getting more credit unions access to the CLF. Your outreach to corporates and leagues is making a difference, and I encourage you to expand it further.
Anthony, you and I discussed a couple of small changes to our website to make it easier to find the application. Do you agree some minor tweaks can make this more user-friendly?
Joining the CLF is easier than you might think. Credit unions, leagues, and others can simply google "NCUA CLF." The first search result will be the page you need.
The application to join is 12 pages. Whether a credit union joins the CLF or gets some other emergency liquidity source, the time to get that arranged is before things go south. If we could predict a liquidity crisis, it wouldn’t be called a crisis.