President to sign credit union liquidity increase

President Clinton is expected to sign a law raising credit unions' backup liquidity to $1.5 billion. That's a 150% increase from the historic level of $600 million.

The backup liquidity comes in the form of borrowing authority for NCUA's Central Liquidity Facility (CLF). The authority is part of a broad appropriations bill for the Veterans Administration, Department of Housing & Urban Development, and other independent agencies.

"We consider $1.5 billion a considerable improvement over the outdated $600 million," noted CUNA President & CEO Dan Mica. "This achievement is especially gratifying given the level of resistance caused by the GAO report."

Senate negotiators backed down from a House-approved liquidity level of $3 billion, in large part because of a General Accounting Office study requested by Congress to answer outstanding questions about the CLF. The study was cited in the Senate Appropriations Committee report (NewsWatch, Sept. 18).

"There are discrepancies in the GAO report that we can point out next year, especially if the Banking Committees hold hearings," reasoned Gary Kohn, CUNA VP and Senior Legislative Counsel.

"We hope this increase is just the beginning," agreed John McKechnie, VP-Legislative

Affairs. "Congress may take a fresh look at this issue next year."

For More CLICK HERE Government Affairs www.cuna.org

Copyright Credit Union National Association, Inc. Oct 16, 2000
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