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Emergency Liquidity & Planning Resource Center

Emergency Liquidity Rule

The NCUA published its final rule 12 CFR Part 741.12 requiring all federally insured credit unions to plan for unexpected liquidity events. The rule outlines requirements for credit unions based on asset size, across three tiers. For more information, please see the chart below.

Note: Your Line of Credit at Alloya Corporate (used for daily settlement and other regular purposes) is not affected by this rule.

Federally Insured Credit Union Asset Size

Liquidity Rule Requirement

Under $50 million

Maintain a basic written liquidity policy. Approved by a credit union’s board, the policy must provide a framework for managing liquidity and a list of contingent liquidity sources that can be employed in emergency situations.

$50 million or more

In addition to a written liquidity policy, federally insured credit unions in this group must have a contingency funding plan that clearly sets out strategies for meeting emergency liquidity needs.

$250 million or more

In addition to a written liquidity policy and contingency funding plan, federally insured credit unions in this group must establish access to at least one contingent federal liquidity source: NCUA’s Central Liquidity Facility, the Federal Reserve’s Discount Window, or both.

How Alloya Can Help

Central Liquidity Facility – The CARES Act, enacted March 27, 2020, brought important changes to the Central Liquidity Facility (CLF). As a CLF Agent Member, Alloya Corporate is able to contribute capital on behalf of member credit unions with assets of $250 million or less as of 12/31/2019. As a result, for these credit unions, there is no action required to borrow from the CLF. For member credit unions whose assets exceed $250 million as of 12/31/2019, capital must be deposited with the CLF by the credit union to become a direct CLF member. As a CLF Correspondent, Alloya can help make that process easier. Once direct CLF membership is established by the credit union, Alloya as the CLF Correspondent can assist with applications, collateral placement and sharing, and transactional duties. CLF loan decisions are made by the CLF.

Discount Window Services – A membership with Alloya offers convenient access to the Federal Reserve Bank's Discount Window without having to establish a separate relationship with the Fed.

Note: The Federal Home Loan Bank is not an acceptable emergency liquidity source.

Count on Alloya’s lending team to help your credit union obtain primary or contingency liquidity, or to facilitate emergency funding. For assistance, contact your Senior Business Consultant or email solutions@alloyacorp.org to connect with a team member.

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