The NCUA board of directors were briefed on the Central Liquidity Facility during the agency’s October meeting on Thursday. Financial highlights for the CLF in the third quarter include:
- $1.243 billion in total assets;
- $1.1 million in year-to-date net income;
- $40.5 million in retained earnings;
- 2.24 percent dividend was paid to members of the CLF in the third quarter;
- 3,991 corporate credit unions and consumer credit unions have access to the CLF; and
- $29.1 billion in borrowing authority for the CLF.
“The CLF is a vital source of emergency liquidity within the credit union system,” said Todd Harper, NCUA board chairman. “However, the pending expiration of the temporary CLF enhancements authorized by Congress at the start of the COVID-19 pandemic remains a very real concern. While we are grateful to Congress for allowing the CLF enhancements of the last few years, there is a real need to keep in place the ability of corporate credit unions to serve as a CLF agent for a subset of their members. That authority will allow us to provide emergency liquidity quickly when needed.”
Risk appetite statement
The NCUA board of directors approved a risk appetite statement, a management tool that provides guidance from agency leadership to managers and staff on the amount of risk the NCUA is willing to undertake in pursuit of its objectives.
The statement was developed through consideration and evaluation of the risks the agency faces and focuses on achieving “programmatic” goals, according to the agency. They include:
- communicating guidelines about the levels of risk the NCUA is willing to accept in pursuit of its mission and goals;
- promoting consistency in understanding, measuring and managing risk across the enterprise;
- informing agency responses to risks and decision-making to balance limited time and resources; and
- driving a more risk-aware culture.
Harper said that he is pleased that the agency will have an averse risk appetite when addressing identified safety and soundness concerns at credit unions. “This means we will be risk-focused and ready to act expeditiously if needed,” he said. “I also appreciate that through this statement we will remain focused on ensuring compliance with and enforcement of federal consumer financial protection laws and regulations at credit unions.”