The Federal Home Loan Bank system, which has emerged as a critical CU backstop, has made a pitch to National Credit Union Administration (NCUA) that could tap the movement for tens of billions of dollars in new funds.
In a letter to NCUA, the 12 FHLBs urged the agency to add them to the short list of emergency liquidity providers, a move that could spur hundreds more CUs to take out membership in one of the regional FHLBs.
The FHLBs have already emerged as an important provider of emergency funding to CUs during the corporate CU turmoil. In fact, during the failure of U.S. Central Federal Credit Union and WesCorp Federal Credit Union, the FHLBs were more than doubling their advances to their 1,060 member CUs, adding almost $25 billion in new funds during the 2007-2008 credit crisis.
"Unlike certain sources of liquidity that are only available during times of emergency, FHLBank Advances serve as a source of liquidity for member institutions, enhancing their funding abilities in all economic cycles," said the FHLB presidents in their letter.
Dozens of credit unions, many of them in form letters, are also calling for the FHLBs inclusion in a final rule.
