Financial Readiness is something we all champion when promoting our credit union values to each of our members. Everything from building a “rainy day” fund and saving 3–6 months of pay to getting out of debt and saving for retirement to and practicing delayed gratification and avoiding credit. These are all sound financial practices, and we should always support efforts that educate and foster these ideals.
The good news is that each of these principles and practices apply to each of our member credit unions, particularly as credit unions continue to find ways to cope with the great economic shutdown of 2020. Fortunately, many of you have told me you will be okay in the short-term. Yet, we are still waiting to see how mortgage forbearances will play out, whether entire industries will vanish along with many jobs, and the prospect of looming tax increases to help pay for it all.
The bad news is the COVID-19 pandemic is not over. In fact, Europe is in the middle of another economic shutdown. Worse, the United States is on the brink of what some leaders are describing as a “dark winter.” Whether this vision is true or not, we need to be prepared. As such, each credit union will need to adapt and have access to a variety of tools, methods, and policies that will enable their continued recovery and success.
One such resource is the NCUA’s Central Liquidity Facility (CLF). The purpose of the CLF is to provide enrolled credit unions with a sustainable source of liquidity. To bolster the CLF’s impact, the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted several important changes to the CLF. These include:
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