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Regulations Part 741.12: Maintaining Access to
Emergency Liquidity

The final rule on emergency liquidity incorporates a three-tiered approach, based on the size of the federally insured credit union. Read More ►

The NCUA Board issued the final rule on March 31, 2014.

Institution-specific issues and market conditions can combine to quickly deplete a credit union’s on-balance sheet liquidity reserve. In such instances, emergency liquidity may be required for a credit union to meet its liquidity needs. 

To ensure credit unions of certain asset sizes have pre-arranged plans to access and/or establish access to emergency liquidity, the National Credit Union Administration has issued a final rule on the need for federally insured credit unions to have contingency funding plans that clearly set out strategies for addressing liquidity shortfalls in emergency situations. Further, the final rule requires credit unions with more than $250 million in total assets to have access to a backup federal liquidity source.

Credit unions have two NCUA-approved options for emergency liquidity: The Central Liquidity Facility (CLF) or the Federal Reserve Discount Window. To learn more about these options, select a button below.


Federal Reserve Discount Window

The discount window is an instrument of monetary policy controlled by the Federal Reserve that allows eligible institutions to borrow money from the Fed, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. 

It can take up to one week for an institution with no Federal Reserve relationship to file the necessary paperwork and pre-position collateral to borrow. Purchasing stock in a regional Federal Reserve Bank is not necessary to establishing borrowing privileges at the Discount Window. Accessing the window requires pre-positioning collateral and completing the forms below:

Corporate One’s role

Corporate One members interested in establishing Discount Window access may use Corporate One as their correspondent bank. Simply complete the required agreement to designate Corporate One as your correspondent bank and submit along with your packet your local Federal Reserve Bank. If you designate Corporate One as your correspondent bank you do not have to open an account with the Fed; however, you can still access to the discount window, providing you have sufficient collateral.