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News Now

Washington
CLF CDRLF addressed in 2012 budget
WASHINGTON (2/16/11)—The maximum loan limitation of the National Credit Union Administration's (NCUA) Central Liquidity Facility (CLF) will continue at its fiscal 2011 level under the Obama administration’s proposed budget for fiscal 2012. The CLF is authorized by the Federal Credit Union Act to lend up to 12 times its paid-in capital. The CLF loan cap was lifted to its maximum amount allowable in late 2008, and the NCUA in 2009 used $10 billion in borrowed CLF funds to stabilize two now failed corporate credit unions, U.S. Central FCU and Western Corporate FCU. The $10 billion, which was borrowed from the U.S. Treasury, was repaid, with interest, by the NCUA in October. Under the Obama administrations proposed 2012 budget, funding for the NCUA’s Community Development Revolving Loan Fund (CDRLF) program would remain at $2 million, equal to 2011’s requested funding level. The CDRLF provides loans and technical assistance to federal and state credit unions that are designated as a low-income credit union, as defined by NCUA regulations. Though the CDRLF was approved for $2 million this year, that amount could decrease substantially if H.R. 1, which was introduced by House Republicans last week, is approved. H.R. 1 would cut $1.5 million from the CDRLF’s requested fiscal 2011 budget of $2 million. If the Republican proposal is not accepted by both legislative branches and approved by the President, then the CDRLFs current funding level will likely be extended for a short period of time. Under a continuing resolution, the U.S. government will be funded through March 4. If a new agreement is not reached, a temporary agreement to continue to fund the government at current levels beyond March 5 is expected to be passed. The 2012 budget, which was released on Monday, also suggests cuts to Small Business Administration programs and Community Development Financial Institution Fund programs. (See related Feb. 15 story: $3.7 trillion budget brings deficit to record $1.6 trillion)


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