MUSKEGO, Wis. (7/9/12)--Corporate Central CU in Muskego, Wis., has established a correspondent arrangement with the Federal Reserve Bank (FRB) through which member credit unions can access the FRB Discount Window via their Corporate Central accounts.
The correspondent arrangement establishes Corporate Central CU as the settlement point. Members of the corporate credit union can request advances from and make payments to the FRB through Corporate Central.
In December, the National Credit Union Administration issued an Advance Notice of Proposed Rulemaking about credit unions establishing access to emergency liquidity, Corporate Central said.
The new rule would require all federally insured credit unions to have access to a backup federal liquidity source for use in times of financial emergency and distressed economic circumstances.
Anticipating the need for credit unions to have a federal liquidity source, Corporate Central CU began working on a solution for members that would fulfill the likely new requirement and simplify the process of establishing and maintaining Discount Window access with the FRB.
"The greatest benefit for our members is the convenience factor," said Robert
W. Fouch, Corporate Central president/CEO. "Credit unions that have established membership with Corporate Central don't need to establish a settlement relationship with the Fed."