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CLF borrowing cap could be raised
WASHINGTON (9/26/08)—As part of a continuing resolution to keep the government funded into 2009, the U.S. House of Representatives has approved a cap increase for the borrowing authority of the National Credit Union Administration’s (NCUA’s) Central Liquidity Facility (CLF) for Fiscal Year 2009. Currently the CLF is authorized by the Federal Credit Union Act to lend up to 12 times its paid-in capital—an amount that translates today to about $41 billion. However, Congress annually caps the CLF lending authority at $1.5 billion through the appropriations process. The House voted yesterday to temporary remove the arbitrary $1.5 billion cap and permit the CLF to lend up to its full statutory authority of $41 billion. The Credit Union National Association (CUNA) worked closely with NCUA and key House members and their staff to secure the higher CLF ceiling. “Eliminating the cap would be preventative and timely,” said Ryan Donovan, CUNA vice president of legislative affairs, Thursday. “We all are aware of the concerns regarding access to liquidity throughout financial markets. Because the elimination of the cap requires an act of Congress, we need this action now before Congress adjourns for the year,” he said. The CLF cap elimination passed the House 370-58 Wednesday as part of the Continuing Resolution and will now be considered in the Senate, where an economic stimulus package, and possibly the Troubled Asset Recover Program, might be added. If approved, then the entire package would have to be considered by the House again for concurrence. “It’s got a long way to go, but the legislation is moving in the right direction,” CUNA’s Donovan said.
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