The Central Liquidity Facility (CLF) is a mixed-ownership United States (U.S.) government corporation created to improve the general financial stability of credit unions by serving as a liquidity lender to credit unions experiencing unusual or unexpected liquidity shortfalls. Member credit unions own the CLF which exists within the National Credit Union Administration (NCUA). The President of the CLF manages the facility under the oversight of the NCUA Board.[1]
The Central Liquidity Facility was created by the U.S. Congress in 1998 with the National Credit Union Central Liquidity Facility Act, Subchapter III of the Federal Credit Union Act. The primary purpose of the CLF is to provide loans to credit unions to meet short or long term liquidity needs. It performs the same general functions for credit unions that the Federal Reserve System performs for member banks.[2]
The Central Liquidity Facility is backed by the credit of the U.S. government. The CLF may borrow up to 12 times its subscribed capital stock and surplus (12 USC 1795f(a)(4)(A)).
CLF is organized into five regional branches to serve different states. To become a member, credit unions purchase stock in the Central Liquidity Facility, at an amount equal to 1/2 of 1% of an average of six months of their unimpaired capital and surplus or $50 (whichever is greater).
The Central Liquidity Facility is a 501(c)(1) organization.[3]
See also
editReferences
edit- ^ "National Credit Union Administration - Central Liquidity Facility". Archived from the original on May 14, 2008. Retrieved 2008-09-05.
- ^ "Title III—Central Liquidity Facility" (PDF). Archived from the original (PDF) on June 7, 2007. Retrieved 2008-09-05.
- ^ "Section 501(l)". Internal Revenue Code. Legal Information Institute. Cornell University Law School. Retrieved June 21, 2017.
This article incorporates public domain material from the United States Government