NCUA News Release
Office of the Chairman

NCUA Chairman Submits Testimony for Central Liquidity
Facility and Community Development Revolving Loan Fund

NCUA Recommends Additional $1 Million Appropriation For CDRLF,
 Bringing Total Requested for CDRLF to $2 Million for FY 2004

Alexandria, VA (April 3, 2003) – In written testimony submitted today to the Appropriations Subcommittee on VA, HUD and Independent Agencies, National Credit Union Administration Chairman Dennis Dollar presented NCUA’s request for fiscal year 2004 funding of the Community Development Revolving Loan Fund and to request $1.5 billion in fiscal year 2004 borrowing authority for NCUA’s Central Liquidity Facility (CLF), and slightly reduced CLF operational expenses for the year. 

Also, Chairman Dollar recommended an additional $1 million appropriation for the Community Development Revolving Loan Fund (CDRLF) over last year’s funding level and stated that such an appropriation “could provide the CDRLF program even greater ability to further the growth and long-term viability of credit unions in low-income and underserved areas.”  This would bring the total amount requested for the CDRLF to $2 million for FY 2004.

Over the years, Congress has increased the number of dollars available for CDRLF loans to $13 million.  For more than 13 years, NCUA has successfully administered the revolving loan program, providing more than 217 loans totaling $32.8 million.  And, in 1992, the NCUA Board began funding technical assistance grants by using the interest generated from the CDRLF loans. In fiscal year 2001, Congress recognized the success of the grants by reserving certain funds specifically for this part of the CDRLF program.  To date, the CDRLF technical assistance grant program has provided more than 1,000 grants totaling $2.4 million.

“NCUA remains committed in our efforts to promote and facilitate the extension of affordable financial services to individuals and communities throughout America as demonstrated by the implementation of the agency’s successful Access Across America initiative.  The CDRLF plays a vital role in the success of Access Across America, which is designed to reach out to underserved communities and create economic empowerment for people from all walks of life,” stated Chairman Dollar in the written testimony submitted.

In 2002, NCUA received requests for loans in the amount of $7,007,000 and were able to approve $2,329,000.  In addition, NCUA distributed $664,314 in technical assistance grants after receiving requests for $1,618,843.  Unfortunately, due to limited resources, NCUA was forced to decline requests for more than $950,000 in technical assistance grants that could have been used to further the availability of much needed services and products through enhanced technology by these low-income designated credit unions, the overwhelming majority of which are smaller and challenged by the costs of advancing technology in the delivery of financial services.

“Access to affordable financial services and products can provide these communities with a much needed and viable alternative to check cashers, pawn shops, and title loan companies which often charge exorbitant rates and fees for credit in many low-income areas.  By providing an alternative to higher-cost lenders, credit unions play a significant and meaningful role in helping residents keep more of their money in their communities and households,” said Chairman Dollar.

The Chairman’s entire written testimony to the Subcommittee is available at www.ncua.gov.

The National Credit Union Administration is governed by a three-member board appointed by the President and confirmed by the Senate, is the independent federal agency that charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates the National Credit Union Share Insurance Fund (NCUSIF), insuring the savings of 80 million account holders in all federal credit unions and many state-chartered credit unions.

-NCUA-