Proposed Rule2026-21089
Central Liquidity Facility
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 15, 2026
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) is proposing to adopt as final the revisions to the Central Liquidity Facility (CLF) rule made under two interim final rules (IFRs) published in the Federal Register on April 29, 2020, and March 24, 2021. The proposal would adopt the amendments made by these IFRs and, where appropriate, would remove provisions from the NCUA's regulations that have lapsed under the terms of the IFRs. The proposal would also remove or modify certain filing requirements and criteria the Board uses to approve CLF members. Finally, the proposal would amend the timing requirements related to pay adjustments to the capital stock subscription, clarify various regulatory provisions, and make necessary conforming edits.
Full Text
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<title>Federal Register, Volume 91 Issue 198 (Thursday, October 15, 2026)</title>
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[Federal Register Volume 91, Number 198 (Thursday, October 15, 2026)]
[Proposed Rules]
[Pages 65481-65489]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21089]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 725
RIN 3133-AF91
Central Liquidity Facility
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) is proposing to adopt as final the
revisions to the Central Liquidity Facility (CLF) rule made under two
interim final rules (IFRs) published in the Federal Register on April
29, 2020, and March 24, 2021. The proposal would adopt the amendments
made by these IFRs and, where appropriate, would remove provisions from
the NCUA's regulations that have lapsed under the terms of the IFRs.
The proposal would also remove or modify certain filing requirements
and criteria the Board uses to approve CLF members. Finally, the
proposal would amend the timing requirements related to pay adjustments
to the capital stock subscription, clarify various regulatory
provisions, and make necessary conforming edits.
DATES: Comments must be received by December 14, 2026.
ADDRESSES: Comments may be submitted in one of the following ways.
(Please send comments by one method only):
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
The docket number for this proposed rule is NCUA-2026-1889. Follow the
``Submit a comment'' instructions. If you are reading this document on
<a href="http://federalregister.gov">federalregister.gov</a>, you may use the green ``SUBMIT A PUBLIC COMMENT''
button beneath this rulemaking's title to submit a comment to the
<a href="http://regulations.gov">regulations.gov</a> docket. A plain language summary of the proposed rule
is also available on the docket website.
<bullet> Mail: Address to Melane Conyers-Ausbrooks, Secretary of
the Board, National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428.
<bullet> Hand Delivery/Courier: Same as mailing address.
Mailed and hand-delivered comments must be received by the close of
the comment period.
Public inspection: Please follow the search instructions on <a href="https://www.regulations.gov">https://www.regulations.gov</a> to view the public comments. Do not include any
personally identifiable information (such as name, address, or other
contact information) or confidential business information that you do
not want publicly disclosed. All comments are public records; they are
publicly displayed exactly as received and will not be deleted,
modified, or redacted. Comments may be submitted anonymously. If you
are unable to access public comments on the internet, you may contact
the NCUA for alternative access by calling (703) 518-6540 or emailing
<a href="/cdn-cgi/l/email-protection#024d45414f636b6e426c6177632c656d74"><span class="__cf_email__" data-cfemail="410e06020c20282d012f2234206f262e37">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Policy: Matthew J. Biliouris, Acting
President, Central Liquidity Facility, at 1775 Duke Street, Alexandria,
VA 22314 or by telephone at (703) 518-1161. Legal: John H. Brolin,
Senior Staff Attorney, Division of Regulations and Legislation, Office
of General Counsel, at 1775 Duke Street, Alexandria, VA 22314 or by
telephone at (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
In response to the COVID-19 pandemic, the Board issued an IFR on
April 29, 2020 (April 29th IFR), which provided credit unions with
greater access to liquidity to help ensure they remain operational
throughout the crisis.\1\ The IFR made it easier and more attractive
for credit unions to join the NCUA's CLF. In addition, the rule made
several amendments to conform to the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act).\2\
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\1\ 85 FR 23731 (Apr. 29, 2020).
\2\ Coronavirus Aid, Relief, and Economic Security Act, Public
Law 116-136, 134 Stat 281 (Mar. 27, 2020).
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The CLF, a mixed-ownership government corporation managed by the
Board, established in 1979, serves as a liquidity source for its member
credit unions.\3\ Its purpose is to improve general financial stability
by meeting the liquidity needs of credit unions and thereby encouraging
savings, supporting consumer and mortgage lending, and providing basic
financial resources to all segments of the economy.
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\3\ Public Law 95-630, 92 Stat 3641 (Nov. 10, 1978), codified at
12 U.S.C. 1795, et seq.
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Section 307 of the FCU Act, 12 U.S.C. 1795f, among other things,
gives the Board the authority to prescribe the manner in which the
general business of the CLF shall be conducted and to prescribe rules
and regulations to carry out the CLF-related provisions of the FCU
Act.\4\ Under this authority, the Board issued the April 29th IFR to
enhance liquidity for credit unions during the COVID-19 pandemic and to
make regulatory changes that cohere to the CARES Act.
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\4\ 12 U.S.C. 1795f.
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The Board emphasized in the April 29th IFR that, while some of the
amendments in the rule were temporary, they would afford significant
liquidity support to the entire credit union system. The Board also
noted that several of the changes in the IFR were conforming changes
based on the recently enacted CARES Act, which temporarily amended the
FCU Act. As such, the changes in the IFR that corresponded to the CARES
Act were initially set to sunset in accordance with the CARES Act on
December 31, 2020. To provide clarity and transparency, the Board
included the temporary changes in the IFR and explained what would
occur upon the sunset of the amendments.
[[Page 65482]]
In December 2020, the Consolidated Appropriations Act, 2021 (CAA)
was passed by Congress.\5\ The CAA, among other things, extended the
sunset date of the CLF enhancements made by the CARES Act until
December 31, 2021.\6\ In response, the Board issued a second IFR on
March 24, 2021 (March 24th IFR), to amend its regulations to reflect
the extensions.\7\ The March 24th IFR responded to comments on the
April 29th IFR and also extended the withdrawal from CLF membership
provisions that the Board included in the April 29th IFR.
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\5\ Consolidated Appropriations Act, 2021, Public Law 116-260,
134 Stat 1182 (Dec. 27, 2020).
\6\ Public Law 116-260, 134 Stat 1182, section 540(a).
\7\ 86 FR 15568 (Mar. 24, 2021).
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The Board received 15 comments in response to the April 29th IFR
and the March 24th IFR. All the comments supported the IFRs. The
comments also requested legislative changes, other changes outside the
scope of the IFRs, or both.
In addition to the changes made by the April 29th IFR and the March
24th IFR, the proposal would also remove or modify certain filing
requirements and criteria the Board uses to approve CLF members.
Finally, the proposal would amend the timing requirements related to
pay adjustments to the capital stock subscription, clarify various
regulatory provisions, and make necessary conforming edits. The changes
to the NCUA's CLF regulations are discussed in more detail in the
section-by-section analysis below.
B. Legal Authority
The Board has the legal authority to issue this proposed rule
pursuant to its plenary rulemaking authority under the Federal Credit
Union Act (FCU Act) and its specific rulemaking authority under the
various provisions the Board administers.\8\ In particular, section 307
of the FCU Act, 12 U.S.C. 1795f, gives the Board the authority to
prescribe the manner in which the general business of the CLF shall be
conducted and to prescribe rules and regulations to carry out the CLF-
related provisions of the FCU Act.\9\
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\8\ 12 U.S.C. 1766, 1789.
\9\ 12 U.S.C. 1795f.
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II. Proposed Rule
A. Nomenclature Changes Throughout Part 725
Current part 725 uses the term ``NCUA Board'' and ``Facility''
interchangeably in numerous places throughout part 725. The Board acts
through the CLF, a mixed-ownership government corporation within the
NCUA, and the Office of the Board. They are separate offices, however,
with separate duties and functions. The interchangeable use of
terminology in part 725 causes confusion for members and applicants
because it is sometimes unclear, in places where the term ``NCUA
Board'' is used, whether the Board is acting through the CLF or the
Office of the Board. The proposed rule would replace the term ``NCUA
Board'' with the term ``Facility'' throughout part 725, unless the
context indicates that the Board would be acting through the Office of
the Board. Regardless of whether the term ``NCUA Board'' or
``Facility'' is used, actions carried out by the CLF pursuant to part
725 originate with the NCUA Board. Accordingly, the proposal would
replace the term ``NCUA Board'' with the term ``Facility'' in current
Sec. Sec. 725.4(c)(1), (d), and (e); 725.5(c), (d), and (e); 725.6(a),
(b), and the second and third sentences in paragraph (c);
725.17(b)(2)(iii); 725.22(a) and (b); 725.23(a) and (b).
B. Definition of ``Facility Lending Officer'' Under Sec. 725.2(g)
Current Sec. 725.2(g) defines the term ``facility lending
officer'' as any employee of the CLF or the NCUA who has been
designated by the NCUA Board as a Facility lending officer. The title
Facility lending officer is antiquated and no longer used by the CLF.
Accordingly, the proposal would remove this definition from Sec.
725.2(g).
C. Definition of ``Liquidity Needs'' Under 725.2(i)
In accordance with the CARES Act, the April 29th IFR amended the
definition of ``liquidity needs'' to remove the words ``primarily
serving natural persons.'' This change was intended to mirror the
statutory change in the CARES Act and clarified that liquidity needs
are not limited to only natural person credit unions but may also
include those of corporate credit unions or a corporate credit union
group. The change allowed corporate credit unions to obtain loans for
their own liquidity needs. The amendment was initially set to sunset in
accordance with the CARES Act on December 31, 2020.
The CAA extended this provision in the CARES Act until December 31,
2021. To address this extension, the NCUA's March 24th IFR amended the
regulatory definition of ``liquidity needs'' to make it clear when the
definition under the CARES Act applied and when such definition would
revert to the pre-CARES Act version after December 31, 2021.
Current Sec. 725.2(i)(1) defines ``liquidity needs'' from April
29, 2020, to December 31, 2021, as the needs of credit unions for
short-term adjustment credit available to assist in meeting temporary
requirements for funds or to cushion more persistent outflows of funds
pending an orderly adjustment of credit union assets and liabilities;
seasonal credit available for longer periods to assist in meeting
seasonal needs for funds arising from a combination of expected
patterns of movement in share and deposit accounts and loans; and
protracted adjustment credit available in the event of unusual or
emergency circumstances of a longer-term nature resulting from
national, regional, or local difficulties. Current Sec. 725.2(i)(2)
defines ``liquidity needs'' after December 31, 2021, as the needs of
credit unions primarily serving natural persons for short-term
adjustment credit available to assist in meeting temporary requirements
for funds or to cushion more persistent outflows of funds pending an
orderly adjustment of credit union assets and liabilities; seasonal
credit available for longer periods to assist in meeting seasonal needs
for funds arising from a combination of expected patterns of movement
in share and deposit accounts and loans; and protracted adjustment
credit available in the event of unusual or emergency circumstances of
a longer-term nature resulting from national, regional, or local
difficulties.
Given that the definition of liquidity needs under current Sec.
725.2(i)(1) sunset on January 1, 2022, the Board is proposing to remove
paragraph (i)(1) and replace it with the definition of liquidity needs
under current Sec. 725.2(i)(2). Accordingly, this proposal would amend
Sec. 725.2(i) to provide that ``liquidity needs'' means the needs of
credit unions primarily serving natural persons for short-term
adjustment credit available to assist in meeting temporary requirements
for funds or to cushion more persistent outflows of funds pending an
orderly adjustment of credit union assets and liabilities; seasonal
credit available for longer periods to assist in meeting seasonal needs
for funds arising from a combination of expected patterns of movement
in share and deposit accounts and loans; and protracted adjustment
credit available in the event of unusual or emergency circumstances of
a longer-term nature resulting from national, regional, or local
difficulties.
[[Page 65483]]
D. Requirement for Natural-Person Credit Unions To Furnish Certain
Reports and Documents Under Sec. 725.3(a)(3)
Current Sec. 725.3(a)(3) requires that a natural-person credit
union applying to become a regular member of the CLF furnish certain
reports and documents with its completed membership application. In
particular, the natural-person credit union must provide a copy of the
credit union's financial and statistical report for the most recent
calendar month; and copies of the credit union's charter and bylaws,
unless the credit union is federally chartered. These requirements were
adopted in nearly identical form in 1979.\10\ NCUA has determined that
it no longer needs to require that copies of such reports and documents
be provided to the CLF for federally insured natural-person credit
unions because copies of the reports and documents can already be
obtained by the CLF through other means, in particular, through the
NCUA's examination process. This is not the case, however, for non-
federally insured natural-person credit unions. Accordingly, to
streamline the NCUA's CLF regulations and eliminate outdated and
unnecessary regulatory requirements, the NCUA is proposing to amend
current Sec. 725.3(a)(3) to provide that in the case of a non-
federally insured natural-person credit union not otherwise subject to
examination by the NCUA, the CLF may require that the credit union
provide financial reports and other information to determine the
financial condition of the credit union.
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\10\ 44 FR 49431, 49438 (Aug. 23, 1979).
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E. Regular Membership Requirements Under Sec. 725.3(b)
Section 725.3(b) had previously provided that, with limited
exception, any credit union that becomes a regular member of the CLF
may not receive CLF advances, without approval of the Board, for six
months after becoming a member. The April 29th IFR eliminated the six-
month waiting period on obtaining CLF advances for a credit union that
becomes a regular member. The Board continues to believe it was
important to remove this restriction in response to the overarching
need to make liquidity assistance timely and the advantages of
accelerating liquidity-need loans to new members outweighed the
practical reasons that having the waiting period afforded to the CLF's
operations. Accordingly, the Board is proposing to adopt this change to
Sec. 725.3(b) as final.
F. Agent Membership in the CLF Under 725.4(a)(2)(ii)
The April 29th IFR, in accordance with the CARES Act, amended the
nature of the requirement for a corporate credit union or group of
corporate credit unions to subscribe to the capital stock of the CLF in
an amount equal to one-half of one percent of the paid-in and
unimpaired capital and surplus of all of the corporate credit union's
or corporate credit union group's natural person credit union members.
This change to prior Sec. 725.4(a)(2) mirrored the statutory change in
the CARES Act and allowed the Board, in its sole discretion, to
determine which grouping of natural person member credit unions of the
applying corporate credit union or corporate credit union group were
considered covered by the agent's membership in the CLF. In turn, the
approved group was the basis for calculating the amount of CLF capital
stock the corporate credit union or corporate credit union group was
required to purchase. This change provided a corporate credit union
with the flexibility to subscribe to the capital stock of the CLF up to
the maximum extent it could afford to do so.
This amendment was initially set to sunset in accordance with the
CARES Act on December 31, 2020. Upon the sunset of the amendment, any
corporate credit union or corporate credit union group that became an
agent member under this provision was required to, within one year from
the sunset date, either (1) purchase CLF stock in accordance with the
terms of the regulation as written post-sunset of the CARES Act
amendments; or (2) terminate its membership in the CLF. The Board
believed that the two options accounted for the temporary nature of the
CARES Act amendments while not causing undue disruption to the
operations of a corporate credit union or corporate credit union group
that joined the CLF under the CARES Act amendments.
The CAA extended this provision in the CARES Act until December 31,
2021.\11\ To address this extension, the NCUA's March 24th IFR amended
Sec. 725.4(a)(2) to make conforming date changes to the section.
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\11\ Consolidated Appropriations Act, 2021, Public Law 116-260,
134 Stat 1182, section 540(a) (Dec. 27, 2020).
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Current Sec. 725.4(a)(2)(ii) sunset on January 1, 2022. Upon the
sunset of the amendment, any corporate credit union or corporate credit
union group that became an agent member under this provision was
required, before January 1, 2023, to either (1) purchase CLF stock in
accordance with the terms of the regulation as written post-sunset of
the CARES Act amendments; or (2) terminate its membership in the CLF.
It has been over two years since the January 1, 2023, deadline passed,
giving credit unions ample time to comply with the requirements of
current Sec. 725.4(a)(2)(ii). Accordingly, this proposal would remove
the language in current Sec. 725.4(a)(2)(ii) and renumber the section
to conform with this change.
G. Agent Member Borrowing Under Sec. Sec. 725.4(a)(2), 725.18(a) and
(d), 725.19(a) and (b)
To effectuate the intent of the CARES Act in a safe and sound
manner, the April 29th IFR included a clarifying amendment to Sec.
725.4(a)(2). Section 725.4(a)(2)(iii) clarified that, from April 29,
2020, until December 31, 2020, an agent member may borrow from the CLF
for its own liquidity needs but, to do so, the agent must first
subscribe to the capital stock of the CLF in an amount equal to one-
half of one percent of the Agent's own paid-in and unimpaired capital
and surplus.\12\ Paragraph (a)(2)(iii) provided further that upon
approval of the application, the Agent shall forward funds equal to
one-half of this stock subscription to the CLF. Paragraph (a)(2)(iii)
also provided that this amount shall be in addition to the amounts
required by paragraph (a)(2)(i) or (ii) of Sec. 725.4, if a corporate
credit union or corporate credit union group joined the CLF as an Agent
and intended to borrow for its own liquidity needs. Finally, paragraph
(a)(2)(iii) provided that any corporate credit union or corporate
credit union group that received a CLF advance for its own liquidity
need under the temporary requirements set forth in this paragraph must,
as of January 1, 2021, and thereafter, not request any additional CLF
advances for its own liquidity needs and continue to follow the terms
of the CLF advance agreement entered into between the Agent and the
CLF. The Board believed the inclusion of this provision appropriately
accounted for the temporary nature of this provision while assuring
agents that loan agreements made during this period will not also be
subject to a sunset provision or be terminated before maturity. The
Board believed the provision struck the appropriate balance between
congressional intent and the tenets of contract law.
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\12\ A credit union is required to pay into the CLF one-half of
the amount required by the regulations and to hold the other one-
half in liquid assets on its balance sheet.
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[[Page 65484]]
Pursuant to the extension provided in the CAA, the Board's March
24th IFR extended the periods in Sec. 725.4(a)(2)(iii) to end on
January 1, 2022. The expanded authority provided for in current
paragraph (a)(2)(iii) has expired by its own terms and no loans remain
outstanding. Accordingly, this proposal would remove the language in
current Sec. 725.4(a)(2)(iii) and renumber the section to conform with
this change.
H. Application Requirements for Corporate Credit Unions Under Sec.
725.4(a)(3) Through (a)(6)
Current Sec. 725.4(a)(3) through (a)(6) set forth certain
requirements that a corporate credit union or a group of corporate
credit unions applying to become an Agent member of the CLF must
follow. In particular, current paragraph (a)(3) requires the applicant
to furnish a copy of the corporate credit union's or unions' financial
and statistical report for the most recent calendar month; copies of
the credit union's or unions' charter and bylaws, unless such credit
union is federally chartered; and a list of all the credit union's or
unions' member natural person credit unions. Current paragraph (a)(4)
requires the applicant to agree to submit to the supervision of the
Board and to comply with all regulations and reporting requirements
which the Board shall prescribe for Agent members. Current paragraph
(a)(5) requires the applicant to agree to submit to periodic
unrestricted examinations by the Board or its designee. Current
paragraph (a)(6) requires the applicant to obtain the written approval
of the Board. These requirements were adopted in nearly identical form
in 1979.\13\ Copies of the aforementioned reports, documents,
agreements, and written approvals remains necessary for the CLF to
approve a corporate credit union or group of corporate credit unions'
application to become an agent member of the CLF. For a federally
insured corporate credit union or a federally insured group of
corporate credit unions, however, copies of the credit union's or
unions' financial and statistical report for the most recent calendar
month, copies of the credit union's or unions' charter and bylaws, and
a list of all the credit union's or unions' member natural person
credit unions are already available to the CLF through the examination
process. In addition, the examination and reporting provisions under
current paragraphs (a)(4) and (a)(5) are already codified in the FCU
Act.\14\ Finally, while approval of the Board is required under the FCU
Act,\15\ the NCUA believes including an express requirement that the
Board approval must be in writing as currently required under paragraph
(b)(6) is unnecessary. Accordingly, to streamline the NCUA's CLF
regulations and eliminate outdated and unnecessary regulatory
requirements, the NCUA is proposing to remove current Sec. 725.4(a)(3)
through (a)(6) in their entirety.
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\13\ Id.
\14\ 12 U.S.C. 1795c(b)(3) and (b)(4) (providing in relevant
part that a corporate credit union or group of corporate credit
unions may become an Agent member by ``agreeing to comply with rules
and regulations the Board shall prescribe with respect to, but not
limited to, management quality, asset and liability safety and
soundness, internal operating and control practices and procedures,
and participation of natural persons in the affairs of such credit
union or credit union group; and agreeing to submit to the
supervision of the Board which shall include, but not be limited to,
reporting requirements and periodic unrestricted examinations.'').
\15\ 12 U.S.C. 1795c(b)(1) (providing in relevant part that a
corporate credit union or group of corporate credit unions may
become an Agent member by ``obtaining the approval of the Board.'').
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For non-federally insured corporate credit unions,\16\ however, the
NCUA would not already have a copy of the credit union's or unions'
financial and statistical report for the most recent calendar month,
copies of the credit union's or unions' charter and bylaws, or a list
of all the credit union's or unions' member natural person credit
unions, which are currently required under 725.4(a)(3). To ensure that
the CLF can obtain copies of this information as part of the Agent
application process, the Board is proposing to generally retain the
requirements in current paragraph (a)(3), but for only non-federally
insured corporate credit unions credit unions not otherwise subject to
NCUA examination. Proposed new paragraph (a)(3) would provide that in
the case of a non-federally insured corporate credit union not
otherwise subject to examination by the NCUA, the CLF may require that
the credit union provide financial reports and other information to
determine the financial condition of the credit union.
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\16\ While the NCUA is currently unaware of any non-federally
insured corporate credit unions, neither the FCU Act nor the NCUA's
regulations prohibit such an institution or institutions from
becoming Agent members of the CLF.
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I. Criteria Corporate Credit Unions Must Meet To Be Agent Members Under
Sec. 725.4(b)
Current Sec. 725.4(b) requires that the Board may approve a
corporate credit union or group of corporate credit unions as an Agent
member if certain criteria are met. In particular, a corporate credit
union or each corporate credit union in a group must meet the following
criteria:
1. The management policies are in writing, approved by the
corporate credit union's board of directors, and reviewed annually by
such board;
2. Adequate internal controls are in place to assure accurate and
timely reporting of transactions and the safeguarding of assets;
3. The financial condition of the corporate credit union is sound
with adequate reserves for losses;
4. Surety bond coverage provides protection for the corporate
credit union while the corporate credit union is performing the duties
of an Agent member of the CLF;
5. Management has demonstrated its ability to use such techniques
as cash flow analysis, budgeting, and projections of sources and uses
of funds to manage the affairs of the corporate credit union
efficiently and in conformity with sound business practices; and
6. There are no practices, procedures, policies, or other factors
that would result in discrimination by the corporate credit union among
natural person credit unions or inhibit its ability to act
independently in its role as an Agent member of the CLF.
The criteria listed in paragraph (b) were originally adopted in a
1979 final rule regarding CLF membership and lending.\17\ A
comprehensive explanation of how or why the criteria were chosen was
not provided.\18\ The criteria, however, appear to have been adopted to
implement 12 U.S.C. 1795c(b)(1), which requires that an agent member of
the CLF ``obtain[ ] the approval of the Board.'' While Board approval
is required under the Federal Credit Union Act, the particular criteria
listed in Sec. 725.4(b) are not expressly listed in the Act. After
careful review of the criteria, the Board has determined that the list
of criteria is obsolete and does not provide a full, accurate list of
all the criteria that should be considered, particularly since
extensions of credit sometimes requires additional analysis to protect
the CLF. Accordingly, the Board is proposing to remove current
paragraph (b) to streamline the NCUA's CLF regulations and eliminate
outdated regulatory requirements. Consistent with the
[[Page 65485]]
removal of paragraph (b), the proposed rule would renumber the
remaining paragraphs in Sec. 725.4.
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\17\ 44 FR 49431 (Aug. 23, 1979).
\18\ But, see, id. at 49433 (Explaining that the criteria listed
in 725.4(b)(6) was ``added in response to concerns expressed to the
NCUA that `political considerations' have, in the past, played a
significant rule in the operations of central credit unions.'').
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J. Independent Audits of Books and Records Under Sec. 725.4(d)
Current Sec. 725.4(d) requires that each Agent, or in the case of
an Agent group, each corporate credit union in the group, must have on
an annual basis a third-party independent audit of its books and
records and provide the CLF with copies of the report of such audit.
Paragraph (d) provides further that the auditor selected must be
recognized by a State or territorial licensing authority as possessing
the requisite knowledge and experience to perform audits. Section
704.15 already requires that federally insured corporate credit unions
provide independently audited financial statements to the NCUA. The
Board believes duplicating that requirement in current Sec. 725.4(d)
is redundant and unnecessary. No such requirement exists, however, for
non-federally insured corporate credit unions. Accordingly, to
eliminate outdated, duplicative, and unnecessary regulatory
requirements, the Board is proposing to revise the language in current
Sec. 725.4(d) to limit its application to only non-federally insured
corporate credit unions. Accordingly, the Board is proposing to revise
the language in current paragraph (d) to provide that each non-
federally insured Agent, or in the case of an Agent group, each non-
federally insured corporate credit union in the group, must have on an
annual basis a third-party independent audit of its books and records
and provide the CLF with copies of the report of such audit. The
proposed language would provide further that the auditor selected must
be recognized by a State or territorial licensing authority as
possessing the requisite knowledge and experience to perform audits.
Consistent with other edits discussed above to Sec. 725.4, current
paragraph (d) would be renumbered as paragraph (c).
K. Limit on CLF Advances for Six Months After Membership Under Sec.
725.4(f)
Current Sec. 725.4(f) provides that a corporate credit union or
group of corporate credit unions which becomes an Agent member of the
CLF after February 23, 1980, may not receive a CLF advance without
approval of the CLF for a period of six months after becoming a member.
The date, February 23, 1980, has long since past and is no longer
necessary in paragraph (f). Accordingly, to streamline the NCUA's CLF
regulations and eliminate outdated and unnecessary provisions, the
Board is proposing to remove the reference to February 23, 1980, in its
entirety. No substantiative changes to the requirements of paragraph
(f) are intended by this amendment. Consistent with the other edits
discussed above to Sec. 725.4, current paragraph (f) would be
renumbered as paragraph (e).
L. Payments to the Capital Stock Subscription Under Sec. 725.5(b)(2)
Current Sec. 725.5(b)(2) requires, among other things, that
payments for adjustments to the capital stock subscription must be
received by the CLF no later than March 31 of the following year. This
timing requirement is overly restrictive and has led to unnecessarily
difficult turn-round times for both CLF members and CLF staff. The NCUA
Board believes that providing additional time for calculating,
processing, and making such payments would benefit CLF members and CLF
staff. Accordingly, the NCUA is proposing to amend the last sentence in
current Sec. 725.5(b)(2) to provide that payments for adjustments must
be received within 90 calendar days of receipt of a capital stock
subscription invoice from the CLF.
M. Termination of Membership Under 725.6
The April 29th IFR amended the waiting periods for a credit union
to terminate its membership in the CLF between April 29, 2020, and
January 1, 2022. Under the FCU Act and prior Sec. 725.6 of the NCUA's
regulations, a credit union member could terminate its membership after
a specified time based on that credit union's stock subscription in the
CLF. Previously, a member of the CLF could terminate its membership as
follows:
1. Six months after notifying the Board in writing of its intention
to do so, if the member's stock subscription constituted less than five
percent of total subscribed CLF stock; or
2. Twenty-four months after notifying the Board in writing of its
intention to do so if the member's stock subscription constituted five
percent or more of total subscribed CLF stock.\19\
---------------------------------------------------------------------------
\19\ 12 CFR 725.6.
---------------------------------------------------------------------------
The April 29th IFR amended Sec. 725.6 to temporarily permit a
credit union, regardless of its percentage amount of stock
subscription, to withdraw from membership in the CLF after notifying
the Board in writing on the earlier of the following:
(A) six months from the date of its written notice to the Board; or
(B) December 31, 2020.
Further, the April 29th IFR amended the NCUA's regulations to allow
any credit union that remained a member after December 31, 2020, to
withdraw from membership immediately upon notifying the Board in
writing of its intent to do so. The Board noted that such an immediate
withdrawal period would expire on December 31, 2021. After December 31,
2021, the termination requirements of current paragraphs (a) and (b) of
this section would be reinstated and apply to all members. The Board
believed that this flexibility was necessary to encourage the greatest
number of eligible credit unions to join the CLF.
The March 24th IFR extended the termination of membership
provisions described above until January 1, 2023. Pursuant to self-
executing language in the April 29th IFR and the March 24th IFR, the
provisions expired on January 1, 2023, and were removed from Sec.
725.6 of the NCUA's regulations by the Federal Register in 2023. Thus,
this proposed rule would not affect these provisions.
N. Agent Member Borrowing Under Sec. 725.17(b)(2)(iv)
The April 29th IFR amended Sec. 725.17 to add new paragraph
(b)(2)(iv), which clarified that an agent may apply for a CLF advance
based on the applicant agent's own liquidity needs. Pursuant to the
extensions provided by the CAA, the Board's March 24th IFR amended
paragraph (b)(2)(iv) further to provide that an agent may apply for a
CLF advance based on the applicant agent's own liquidity needs, for the
period beginning April 29, 2020, and ending on December 31, 2021. The
March 24th IFR provided further that, after this period, an agent is
prohibited from submitting an application for an extension for its own
liquidity needs. Given the provision in current paragraph (b)(2)(iv)
ended by its own terms on December 31, 2021, this proposal would amend
Sec. 725.17 to remove the paragraph from the NCUA's regulations.
O. Applications for Extensions of Credit Under Sec. 725.17(a) and (b)
Current Sec. 725.17(a) provides that a Regular member may apply
for a CLF advance to meet its liquidity needs by filing an application
on a CLF-approved form, or by any other method approved by the CLF.
Current Sec. 725.17(b)(1) provides in relevant part that an Agent
member may apply for a CLF advance by filing an application on a CLF-
approved form, or by any other method approved by the CLF. Footnote 4
at the end of paragraph (b)(1) provides further that if the Agent is an
Agent group, the
[[Page 65486]]
application must be filed by the Agent group representative, and any
CLF advance will be made to the Agent group representative. To
streamline the NCUA's CLF regulations and eliminate outdated and
unnecessary provisions, the Board is proposing to merge the language in
paragraphs (a) and (b)(1) into a revised paragraph (a) and to also
incorporate into revised paragraph (a) the text of footnote 4. Proposed
Sec. 725.17(a) would provide that a Regular member or Agent member may
apply for a CLF advance to meet its liquidity needs by filing an
application on a CLF-approved form, or by any other method approved by
the CLF. Proposed paragraph (a) would provide further that if the Agent
is an Agent group, the application must be filed by the Agent group
representative and the advance will be made to the representative.
P. Agent Member Borrowing Under Sec. Sec. 725.18 and 725.19
The April 29th IFR made conforming changes to Sec. Sec. 725.18 and
725.19 to clarify the requirements applicable to a CLF advance to an
agent for such agent's own needs. In particular, the IFR amended Sec.
725.18(a) to provide that, prior to CLF approval of each application of
a regular member for a CLF advance or an agent member for a CLF advance
for such agent member's own need, the CLF shall consider the
creditworthiness of such member. The Board's March 24th IFR clarified
paragraph (a) to provide that, prior to CLF approval of each
application of a regular member for a CLF advance or an agent member
for a CLF advance for such agent member's own need (provided such agent
may submit an application under Sec. 725.17(b)(2)(iv)), the CLF shall
consider the creditworthiness of such member. Given the provisions in
Sec. 725.17(b)(2)(iv) lapsed on January 1, 2022, this proposal would
amend current Sec. 725.18(a) to remove the conforming and clarifying
changes made by both the April 29th IFR and the March 24th IFR.
Accordingly, current paragraph (a) would provide that, prior to CLF
approval of each application of a regular member for a CLF advance, the
CLF shall consider the creditworthiness of such member.
In addition, the April 29th IFR amended Sec. 725.18(d) to provide
that a credit union (whether a regular member of the CLF, agent member,
or a member natural person credit union) that does not meet the CLF's
creditworthiness standards may be limited in or denied the use of
advances for its liquidity needs. The March 24th IFR clarified
paragraph (d) to provide that a credit union (whether a regular member
of the CLF, agent member (provided such agent may submit an application
under Sec. 725.17(b)(2)(iv), or a member natural person credit union)
which does not meet the CLF's creditworthiness standards may be limited
in or denied the use of advances for its liquidity needs. Given the
provisions in Sec. 725.17(b)(2)(iv) lapsed on January 1, 2022, this
proposal would amend current Sec. 725.18(d) to remove the conforming
and clarifying changes made by both the April 29th IFR and the March
24th IFR. Accordingly, current paragraph (d) would provide that a
natural person credit union (whether a regular member of the CLF or a
member natural person credit union) which does not meet the CLF's
creditworthiness standards may be limited in or denied the use of
advances for its liquidity needs.
The April 29th IFR also made conforming changes to Sec. 725.19(a)
to provide that each CLF advance and each agent loan shall be secured
by a first priority security interest in collateral of the credit union
with a net book value at least equal to an amount as required by the
CLF's collateral table, published at <a href="http://www.NCUA.gov">www.NCUA.gov</a>, or by guarantee of
the National Credit Union Share Insurance Fund (NCUSIF). The amendments
to paragraph (a) also reduced the amount of collateral required for
certain assets used to secure each CLF advance and each agent loan.
Section 725.19 previously required that each CLF advance and each agent
loan be secured by a first priority security interest in collateral of
the credit union with a net-book value at least equal to 110 percent of
all amounts due under the applicable CLF advance or agent loan, or by
guarantee of the NCUSIF. The collateral table varies the required
collateral percentages based upon different types of assets, and in
some cases requires less than 110 percent. Depending on the types of
assets a member has available to secure an advance request, lowering
the collateral requirement for certain types of assets eased the
collateral requirements and permitted a greater amount of borrowing
overall. The Board replaced the 110 percent requirement with a
requirement that a credit union collateralize a CLF advance or agent
loan per the CLF collateral table posted on the NCUA's website,
<a href="http://www.NCUA.gov">www.NCUA.gov</a>. This proposed rule would adopts as final the conforming
changes to Sec. 725.19(a) by the April 29th IFR.
The April 29th IFR also made conforming changes to Sec. 725.19(b)
to provide that the CLF may accept as collateral for each CLF advance
to a regular member or to an agent member, for such agent member's own
needs, a security interest in all assets of the member; provided,
however, that the value of any assets in which any third party has a
perfected security interest that is superior to the security interest
of the CLF shall be excluded for purposes of complying with the
requirements. Given the provisions in Sec. 725.17(b)(2)(iv) lapsed on
January 1, 2022, this proposal would amend current Sec. 725.19(b) to
remove the conforming changes made by the April 29th IFR. Accordingly,
Sec. 725.19(b) would provide that the CLF may accept as collateral for
each CLF advance to a regular member, a security interest in all assets
of the regular member; provided, however, that the value of any assets
in which any third party has a perfected security interest that is
superior to the security interest of the CLF shall be excluded for
purposes of complying with the requirements.
Q. Collateral Requirements Under Sec. 725.19(a)
Current Sec. 725.19(a) provides that each CLF advance and each
Agent loan shall be secured by a first-priority security interest in
collateral of the credit union with a net value at least equal to an
amount as required by the CLF's collateral margins table, published at
<a href="http://www.NCUA.gov">www.NCUA.gov</a>, or by guarantee of the National Credit Union Share
Insurance Fund. To account for the CLF's preferred use of terminology
with regard to the terms ``net book value'' and ``collateral table,''
the proposed rule would amend Sec. 725.19(a) to instead use the more
commonly used terms ``net value'' and ``collateral margins table.''
Accordingly, the proposal would amend Sec. 725.19(a) to provide that
each CLF advance and each agent loan shall be secured by a first-
priority security interest in collateral of the credit union with a net
value at least equal to an amount as required by the CLF's collateral
margins table, published at <a href="http://www.NCUA.gov">www.NCUA.gov</a>, or by guarantee of the
NCUSIF.
III. Regulatory Procedures
A. Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 (5
U.S.C. 553(b)(4)) (Act) requires that a notice of proposed rulemaking
include the internet address of a summary of not more than 100 words in
length of a proposed rule, in plain language, that shall be posted on
the internet website under section 206(d) of the E-Government Act of
2002 (44 U.S.C. 3501
[[Page 65487]]
note) (commonly known as <a href="http://regulations.gov">regulations.gov</a>).
The proposed rule would adopt as final the revisions to the CLF
rule made under two IFRs published on April 29, 2020, and March 24,
2021. The proposal would adopt the amendments made by these IFRs and,
where appropriate, would remove provisions from the NCUA's regulations
that have lapsed under the terms of the IFRs. The proposal would also
remove or modify certain filing requirements and criteria the Board
uses to approve CLF members. Finally, the proposal would amend the
timing requirements related to pay adjustments to the capital stock
subscription, clarify various regulatory provisions, and make necessary
conforming edits.
The proposal and the required summary can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
B. Executive Orders 12866, 13563, 14192
Pursuant to Executive Order 12866 (``Regulatory Planning and
Review''), a determination must be made whether a regulatory action is
significant and therefore subject to review by the Office of
Information and Regulatory Affairs (OIRA), within the Office of
Management and Budget (OMB) in accordance with the requirements of the
Executive Order.\20\ Executive Order 13563 (``Improving Regulation and
Regulatory Review'') supplements and reaffirms the principles,
structures, and definitions governing contemporary regulatory review
established in Executive Order 12866.\21\ This proposed rule was
drafted and reviewed in accordance with Executive Order 12866 and
Executive Order 13563. OIRA has determined that this proposed rule is
not a ``significant regulatory action'' as defined by section 3(f) of
Executive Order 12866.
---------------------------------------------------------------------------
\20\ 58 FR 51735 (Oct. 4, 1993).
\21\ 76 FR 3821 (Jan. 21, 2011).
---------------------------------------------------------------------------
Executive Order 14192 (``Unleashing Prosperity Through
Deregulation'') requires that any new incremental costs associated with
new regulations shall, to the extent permitted by law, be offset by the
elimination of existing costs associated with at least 10 prior
regulations.\22\ This proposed rule is not an Executive Order 14192
regulatory action because this rule is not significant under Executive
Order 12866.
---------------------------------------------------------------------------
\22\ 90 FR 9065 (Feb. 6, 2025).
---------------------------------------------------------------------------
C. Regulatory Flexibility Act
The Regulatory Flexibility Act \23\ generally requires an agency to
conduct a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements, unless the agency certifies that
the rule will not have a significant economic impact on a substantial
number of small entities. If the agency makes such a certification, it
shall publish the certification at the time of publication of either
the proposed rule or the final rule, along with a statement providing
the factual basis for such certification.\24\ For purposes of this
analysis, the NCUA considers small credit unions to be those having
under $100 million in assets.\25\ The Board fully considered the
potential economic impacts of the regulatory amendments on small credit
unions.
---------------------------------------------------------------------------
\23\ 5 U.S.C. 601 et seq.
\24\ 5 U.S.C. 605(b).
\25\ 80 FR 57512 (Sept. 24, 2015).
---------------------------------------------------------------------------
This proposed rule would adopt certain IFR changes as final and
remove certain criteria the Board requires to approve CLF members.
These amendments would not impose any requirements on regulated
entities, particularly not small entities. Accordingly, the NCUA
certifies the proposed rule would not have a significant economic
impact on a substantial number of small credit unions.
D. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) generally provides that
an agency may not conduct or sponsor, and not withstanding any other
provision of law, a person is not required to respond to, a collection
of information, unless it displays a currently valid Office of
Management and Budget control number. The PRA applies to rulemakings in
which an agency creates a new or amends existing information collection
requirements. For purposes of the PRA, an information-collection
requirement may take the form of a reporting, recordkeeping, or a
third-party disclosure requirement. The NCUA has determined that the
changes addressed in this notice do not create a new information
collection or revise an existing information collection as defined by
the PRA.
E. Executive Order 13132 on Federalism
Executive Order 13132 encourages certain agencies to consider the
impact of their actions on state and local interests. The proposed rule
would adopt as final the amendments made by two IFRs and, where
appropriate, removes provisions from the NCUA's regulations that have
lapsed under the terms of the IFRs. In addition, the proposed rule
would remove certain criteria the Board requires to approve CLF
members. Any effect on the states, on the relationship between the
National Government and the states, or on the distribution of power and
responsibilities among the various levels of government does not rise
to the level of material impact for purposed of Executive Order 13132.
F. Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this proposed rule will not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999, Public Law 105-277, 112
Stat. 2681 (1998) given that the proposed rule would implement changes
already made to the NCUA's regulations through the April 29, 2020, and
March 24, 2021 IFRs, and would remove certain criteria the Board
requires to approve CLF members.
List of Subjects in 12 CFR Part 725
Credit unions, Reporting and recordkeeping requirements.
By the National Credit Union Administration Board, this 13th day
of October, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons discussed above, the Board proposes to amend 12 CFR
part 725 as follows:
PART 725--NATIONAL CREDIT UNION ADMINISTRATION CENTRAL LIQUIDITY
FACILITY
0
1. The authority citation for part 725 continues to read as follows:
Authority: 12 U.S.C. 1795f(a)(2).
0
2. Amend Sec. 725.2 by:
0
a. Removing paragraph designations (a) through (p) and placing each
definition in alphabetical order;
0
b. Removing the definition of ``facility lending officer;'' and
0
c. Revising the definition of ``liquidity needs''.
The revisions read as follows:
Sec. 725.2725 Definitions.
* * * * *
Liquidity needs means the needs of credit unions primarily serving
natural persons for:
(1) Short-term adjustment credit available to assist in meeting
temporary requirements for funds or to cushion more persistent outflows
of funds
[[Page 65488]]
pending an orderly adjustment of credit union assets and liabilities;
(2) Seasonal credit available for longer periods to assist in
meeting seasonal needs for funds arising from a combination of expected
patterns of movement in share and deposit accounts and loans; and
(3) Protracted adjustment credit available in the event of unusual
or emergency circumstances of a longer-term nature resulting from
national, regional or local difficulties.
* * * * *
0
3. Revise and republish Sec. 725.3 to read as follows:
Sec. 725.3725 Regular membership.
(a) A natural person credit union may become a Regular member of
the Facility by:
(1) Making application on a form approved by the Facility;
(2) Subscribing to capital stock of the Facility in an amount equal
to one-half of 1 percent of the credit union's paid-in and unimpaired
capital and surplus, as determined in accordance with Sec. 725.5(b) of
this part, and forwarding with its completed application funds equal to
one-half of this stock subscription; and
(3) In the case of a non-federally insured natural-person credit
union not otherwise subject to examination by the NCUA, the CLF may
require that the credit union provide financial reports and other
information to determine the financial condition of the credit union.
(b) [Reserved]
0
4. Revise and republish Sec. 725.4 to read as follows:
Sec. 725.4 Agent Membership.
(a) A corporate credit union or a group of corporate credit unions
may become an Agent member of the Facility by (in the case of a group
of corporate credit unions, each corporate credit union in the group
must do each of the following except for paragraph (a)(2) of this
section, which shall be done by the Agent group representative):
(1) Making application on a form approved by the Facility;
(2) Subscribing to the capital stock of the Facility in an amount
equal to one-half of 1 percent of the paid-in and unimpaired capital
and surplus (as determined in accordance with Sec. 725.5(b) of this
part) of all the corporate credit union's or corporate credit union
group's member natural person credit unions, except those which are
Regular members of the Facility or which have access to the Facility
through, and are included in the stock subscription of, another Agent
(a natural person credit union which is a member of more than one Agent
member of the Facility must designate through which Agent it will deal
with the Facility, and the designated Agent will be responsible for
including the capital and surplus of such credit union in the
calculation of its stock subscription). Upon approval of the
application, the Agent shall forward funds equal to one-half of this
initial stock subscription to the Facility; and
(3) In the case of a non-federally insured corporate credit union
not otherwise subject to examination by the NCUA, the CLF may require
that the credit union provide financial reports and other information
to determine the financial condition of the credit union.
(b) Each Agent, or in the case of an Agent group, each corporate
credit union in the group, must:
(1) Maintain records related to Facility activity in conformity
with requirements prescribed by the Facility from time to time; and
(2) Submit such reports as may be required by the Facility to
determine financial soundness, quality and level of service, and
conformity with established guidelines and procedures.
(c) Each non-federally insured Agent, or in the case of an Agent
group, each non-federally insured corporate credit union in the group,
must have on an annual basis a third-party independent audit of its
books and records and provide the Facility with copies of the report of
such audit. The auditor selected must be recognized by a State or
territorial licensing authority as possessing the requisite knowledge
and experience to perform audits.
(d) Within 30 days after a natural person credit union becomes a
member of a corporate credit union which is an Agent or a member of an
Agent group, the Agent, or in the case of an Agent group, the Agent
group representative, shall subscribe to additional capital stock of
the Facility in an amount equal to one-half of 1 percent of such credit
union's paid-in and unimpaired capital and surplus, and shall forward
funds equal to one-half of this stock subscription to the Facility.
This subsection shall not apply if the natural person credit union is a
Regular member of the Facility or has access to the Facility through,
and is included in the stock subscription of, another Agent.
(e) A corporate credit union or group of corporate credit unions
which becomes an Agent member of the Facility, may not receive a
Facility advance without approval of the Facility for a period of six
months after becoming a member. This subsection shall not apply to any
credit union which becomes an Agent member or a member of an Agent
group within six months after such credit union is chartered or within
six months after such credit union has been an Agent or a member of
another Agent group.
(f) Agent members will be compensated for the services they perform
for the Facility in a manner to be specified by the Facility.
0
5. Amend Sec. 725.5 by:
0
a. Removing the term ``NCUA Board'' each place it appears and replacing
it with ``Facility;'' and
0
b. Revising paragraph (b)(2).
The revision reads as follows:
Sec. 725.5 Capital stock.
* * * * *
(b) * * * (2) Adjusted at the close of each calendar year in
accordance with an arithmetic average of paid-in and unimpaired capital
and surplus over the twelve months in such calendar year. Payments for
adjustments must be received within 90 calendar days of receipt of a
capital stock subscription invoice from the facility.
* * * * *
0
6. Amend Sec. 725.6 by:
0
a. Amending paragraphs (a) and (b) by removing the term ``NCUA Board''
each place it appears and replacing it with ``Facility;'' and
0
b. Revising paragraph (c).
The revision reads as follows:
Sec. 725.6 Termination of Membership.
* * * * *
(c) The NCUA Board may terminate membership in the Facility if,
after the opportunity for a hearing, the NCUA Board determines the
member has failed to comply with any provision of Title III of the
Federal Credit Union Act or any regulation issued pursuant thereto. If
membership is terminated under this subsection, the credit union will
be required to obtain the approval of the Facility before becoming a
member of the Facility again. Such approval will be granted only if the
Facility is satisfied that the credit union will comply with such Act
and regulations.
* * * * *
0
7. Amend Sec. 725.17 by:
0
a. Removing footnote 4; and
0
b. Revising paragraphs (a), (b), and (d).
The revisions read as follows:
Sec. 725.17 Applications for extensions of credit.
(a) A Regular member or Agent member may apply for a Facility
advance to meet its liquidity needs by filing an application on a
Facility-approved form, or by any other method approved by the
Facility. If the Agent is an Agent group, the application must be filed
by the Agent group representative,
[[Page 65489]]
and the advance will be made to the representative.
(b) (1) The Agent's application shall be based on the following:
(i) Approved applications to the Agent by its member natural person
credit unions for pending loans to meet liquidity needs;
(ii) Outstanding loans previously made by the Agent to meet
liquidity needs of its member natural person credit unions; or
(iii) Such other demonstrable liquidity needs as the Facility may
specify.
(2) An Agent shall not submit an application to the Facility based
on the liquidity needs of any member natural person credit union which
has not agreed to the repayment, security and credit reporting terms
prescribed by the Facility for Agent loans;
(3) Any loan to meet liquidity needs which have been or will be the
basis for an application by the Agent for a Facility advance must be
applied for on an application form approved by the Facility.
(4) Unless approved by the Facility, an Agent shall not submit an
application to the Facility based on the liquidity needs of any credit
union which became a member natural person credit union of the Agent
after February 2, 1980, unless such credit union has been a member
natural person credit union of the Agent for six months, was chartered
within six months before becoming a member natural person credit union
of the Agent, or had access to the Facility either as a Regular member
or through another Agent within six months before becoming a member
natural person credit union of the Agent.
* * * * *
(d) Applications of Regular and Agent members shall be filed with
the Facility. Each application for credit which is completed and
properly filed will be approved or denied within five working days
after the day of receipt.
0
8. In Sec. 725.18, revise paragraph (a) and (d) to read as follows:
Sec. 725.18 Creditworthiness.
(a) Prior to Facility approval of each application of a Regular
member for a Facility advance, the Facility shall consider the
creditworthiness of such member.
* * * * *
(d) A natural person credit union (whether a Regular member of the
Facility or a member natural person credit union) which does not meet
the Facility's creditworthiness standards may be limited in or denied
the use of advances for its liquidity needs.
0
9. In Sec. 725.19, revise paragraphs (a) and (b) to read as follows:
Sec. 725.19 Collateral requirements.
(a) Each Facility advance and each Agent loan shall be secured by a
first-priority security interest in collateral of the credit union with
a net value at least equal to an amount as required by the Facility's
collateral margins table, published at <a href="http://www.NCUA.gov">www.NCUA.gov</a>, or by guarantee of
the National Credit Union Share Insurance Fund.
(b) The Facility may accept as collateral for each Facility advance
to a Regular member, a security interest in all assets of the Regular
member; provided, however, that the value of any assets in which any
third party has a perfected security interest that is superior to the
security interest of the Facility shall be excluded for purposes of
complying with the requirements of paragraph (a) of this section.
* * * * *
0
10. Revise Sec. 725.22 to read as follows:
Sec. 725.22 Advances to insurance organizations.
(a) In accordance with policies established by the Facility, it may
advance funds to a State-credit-union share or deposit insurance
corporation, guaranty credit union, guaranty association, or similar
organization. Requests for such advances shall be supported by an
application which sets forth and supports the need for the advance.
(b) Advances under paragraph (a) of this section shall be subject
to the approval of the Facility and shall be made subject to the
following terms:
(1) The advance shall be fully secured,
(2) The maturity of the advance shall not exceed 12 months,
(3) The advance shall not be renewable at maturity, and
(4) The funds advanced shall not be relent at an interest rate
exceeding that imposed by the Facility.
Sec. 725.23 [Amended]
0
11. Amend Sec. 725.23 by removing the term ``NCUA Board'' each place
it occurs and replacing it with ``Facility.''
[FR Doc. 2026-21089 Filed 10-14-26; 8:45 am]
BILLING CODE 7535-01-P
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</html>Indexed from Federal Register on October 15, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.