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, acting as the lender of last resort. 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 Secretary of the Treasury is authorized to lend up to $500,000,000 to the Facility in the event the Board certifies to the Secretary that the Facility does not have sufficient funds to meet liquidity needs of credit unions.[2]
CLF is organized into five regional branches to serve different states. To become a member, credit unions purchase stock in the Central Liquidity Facility, initially at $50 par value per share.
This article incorporates public domain material from the United States Government document "http://www.ncua.gov/CLF/index.htm".