An inspector general report on the federal credit union regulator’s liquidity facility for credit unions suggests that the regulator determine whether to seek to extend the due date for member credit unions’ annual stock adjustment payments beyond March 31.
The audit scope covered the National Credit Union Administration’s (NCUA) operation of the Central Liquidity Facility (CLF) from January 2020 to March 31, 2024, the report says.
The audit, the report states, found that the CLF did not receive payments from members for the annual adjustments to their capital stock subscriptions by the March 31 deadline as required under current regulation. The OIG did not fault internal controls or process, but noted the annual stock adjustment calculation performed by the CLF relies on credit union call report data, and that data is not available to the CLF in a timeframe which would allow the March 31 deadline to be met.
“Our testing of a sample of CLF members identified that in all 12 instances where a member was required to make a payment to the CLF, the payment was late by 4 to 32 days, with 12 days being the average delay,” the report says. By regulation, stock adjustment payments are due no later than March 31 of the following year, the OIG noted.
It said late payments delayed the CLF’s investment of the paid-in funds, which affects interest earnings, though the report states this had only a “de minimis” (too small to be meaningful) financial impact on the CLF.
The OIG is not recommending that management address this, but said it suggests that NCUA management “determine whether they want to pursue any action to extend the due date beyond March 31st for member payments to the CLF.”
The OIG said it conducted this audit on its own to determine (1) whether the NCUA operates the CLF in accordance with relevant laws, regulations, policies, and procedures; and (2) the utilization of the CLF by credit unions covered by the temporary authority granted by the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). The audit generally found the agency operated the CLF in accordance with applicable laws and that it “substantially” complied with regulations and its own policies, and procedures. It also discussed findings related to the addition and termination of credit union memberships in the CLF.
NCUA data shows the CLF had 437 members as of Jan. 31.
Audit of the NCUA’s Central Liquidity Facility (Report #OIG-25-06)
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