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Emergency Liquidity & Planning


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Emergency Liquidity Rule

On October 24, 2013, the NCUA published its final rule 12 CFR Part 741.12 requiring all federally insured credit unions to plan for unexpected liquidity events, effective March 31, 2014.The rule outlines requirements for credit unions based on asset size, across three tiers.

Federally Insured
Credit Union Asset Size

Liquidity Rule Requirement
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Under $50 million
Maintain a basic written liquidity policy. Approved by a credit union’s board, the policy must provide a framework for managing liquidity and a list of contingent liquidity sources that can be employed in emergency situations.
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$50 million or more
In addition to a written liquidity policy, federally insured credit unions in this group must have a contingency funding plan that clearly sets out strategies for meeting emergency liquidity needs.
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$250 million or more
In addition to a written liquidity policy and contingency funding plan, federally insured credit unions in this group must establish access to at least one contingent federal liquidity source: NCUA’s Central Liquidity Facility, the Federal Reserve’s Discount Window, or both.

How Alloya Can Help

Central Liquidity Facility – Credit unions must deposit capital with the CLF to become CLF members. Once membership is established, Alloya Corporate, as CLF administrator, can assist with applications, collateral placement and sharing, and transactional duties. CLF loan decisions are made by the CLF.

Discount Window – A membership with Alloya offers convenient access to the Federal Reserve Bank’s Discount Window without having to establish a separate relationship with the Fed.

 

Note: the Federal Home Loan Bank is not an acceptable emergency liquidity source.

Not Affected by the Rule – Your Line of Credit at Alloya
Your line of credit at Alloya (used for daily settlement and other regular purposes) is not affected by this rule.

Your Lending Team at Alloya
Count on Alloya’s lending team to help your credit union obtain primary or contingincy liquidity, or to facilitate emergency funding. For assistance, contact your Senior Business Consultant or email solutions@alloyacorp.org to be connected with a team member.

The resources to the right provide additional information.

   
   
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spacerResource Links
   
  Emergency Liquidity Rule
 
   
  bulletNCUA Letter to Credit Unions
   
Scroll down to Table 2 for NCUA’s Compliance Timetable
 
  indentNCUA Video
  bulletLiquidity & Contingency
indent Funding Plans
   
  Planning, Tools
  indent NEW! Webinar: Rule Follow-up
  bulletView Recording
  bulletRequest Slides(PDF)
   
  indent Webinar: Rule, Actions
  bulletView Recording
  bulletRequest Slides(PDF)
   
  indentNCUA Overview
  bulletCentral Liquidity Facility
   
  bulletCLF vs. Discount Window
   
 
  indentClick to Open, or Right-Click,
indent'Save Target As' to Download
  bulletNEW! CLF Stock Calculator
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indent(Excel)
   
  bulletDiscount Window via Alloya
   
 
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