NCUA’s Central Liquidity Facility assets, membership growing

ALEXANDRIA, VA  (April 11, 2014) – The Central Liquidity Facility’s financial performance showed overall positive trends in the first quarter of 2014, and its stock dividend rate increased to 0.25 percent, the National Credit Union Administration announced today.

“It’s most encouraging to see the CLF performing well,” NCUA Board Chairman Debbie Matz said. “The CLF is a reliable source of emergency liquidity, which is important to the stability of the credit union system. The 69 percent increase in credit union participation during the last year has also resulted in more CLF borrowing capacity to meet emergency liquidity needs.”

Financial data for the first quarter of 2014 show:

  • CLF membership grew to 218 credit unions, up from 129 at the end of the first quarter of 2013.
  • Assets reached $180 million, up from $115 million at the end of the first quarter of 2013.
  • Retained earnings reached $27.8 million, up from $27.4 million at the end of the first quarter of 2013.
  • Maximum legal borrowing authority grew to $3.8 billion, up from $2.4 billion at the end of the first quarter of 2013.

The 0.25 percent stock dividend rate for the CLF is a significant change from the 0.10 percent rate paid quarterly since the fourth quarter of 2012. CLF management expects moderate growth in both membership and portfolio earnings during 2014, with a strong likelihood the 0.25 percent rate will continue.

The CLF’s steady growth in membership and assets has enabled it to expand its earnings base and borrowing capacity, increase retained earnings and pay the higher dividend rate.

The NCUA Board approved a targeted final rule at its October 2013 meeting requiring federally insured credit unions to take specific steps to ensure access to a source of emergency liquidity. As of March 31, 2014, credit unions with assets greater than $250 million must have established access to at least one contingent federal liquidity source, either the CLF or the Federal Reserve’s Discount Window, or both. Credit unions with assets between $50 million and $250 million must have a contingency funding plan for meeting emergency liquidity needs, and credit unions with assets of less than $50 million must have a policy for managing liquidity.

The Central Liquidity Facility is a mixed-ownership government corporation created to support credit unions’ stability by serving as a source of emergency liquidity for credit unions experiencing unusual or unexpected liquidity needs.

Member credit unions own the CLF, which exists within NCUA. The President of the CLF manages the facility under the oversight of NCUA’s Board. CLF membership is voluntary and open to all credit unions that purchase a prescribed amount of CLF stock.

NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 96 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At and Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues.

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