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.

Resource Links

Emergency Liquidity Rule

Scroll down to Table 2 for NCUA’s Compliance Timetable

NCUA Video

Planning, Tools

Webinar: Rule Follow-up

Webinar: Rule, Actions

NCUA Overview

 Guide

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