Final Rule Summary

Prepared by NASCUS Regulatory Affairs Department
November, 2015

NCUA 12 CFR Part 704                             Corporate Credit Unions and CLF Bridge Loans
NCUA has issued a final rule excluding Central Liquidity Facility-related bridge loans (CLF-related bridge loans) from the corporate credit union limit on aggregate unsecured lending to one borrower. The final rule will apply to situations where a natural person credit union has been approved for a loan by the CLF and obtains a bridge loan from a corporate until the CLF funds can be transferred. The final rule also excludes CLF-related bridge loans from the calculation of ‘‘net assets’’ and ‘‘net risk weighted assets’’ for determining minimum capital requirements.

The final rule became effective October 23, 2015 and may be read in its entirety here.


The final rule will amend the § 704.2 definition of a CLF-related bridge loan to mean:

  • interim financing, extending up to ten business days, that a corporate credit union provides for a natural person credit union from the time the CLF approves a loan to the natural person credit union until the CLF funds the loan. To repay a CLF-related bridge loan, the borrowing natural person credit union assigns the proceeds of the CLF advance to the corporate credit union making the CLF-related bridge loan for the duration of the bridge loan.

In addition, other definitions within Part 704.2 are amended as follows:

  • “Net assets” are defined as total assets less CLF stock subscriptions, CLF related bridge loans, NCUSIF guaranteed loans and member reverse repurchase transactions. The definition of “net assets” also deducts any amounts that were deducted from calculations of Tier I capital.
  • The above deductions from “net assets” are also deducted from the calculations of “net risk-weighted assets.”

The lending provisions of § 704.7 were amended to reflect the final rule’s exclusion of CLF related bridge loans from the 50% of capital lending limit. Pass through and guaranteed loans are also excluded from the aggregate limit.