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Federal Register / Vol. 86, No. 55 / Wednesday, March 24, 2021 / Rules and Regulations sunset date of the CLF enhancements in the CARES Act to December 31, 2021.4
To provide clarity and transparency, the Board is issuing this interim final rule to amend its regulations to reflect this extension.
In addition, the Board notes that in response to the April interim final rule, the Board received five comments which supported the rule. The comments also requested legislative changes and/or changes outside the scope of the April interim final rule.
II. Amendments The following is a section-by-section analysis of the changes in this interim final rule.
Part 725

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A. Definitions In accordance with the CARES Act, the Board amended the definition of Liquidity needs to remove the words primarily serving natural persons.
This change mirrored the statutory change in the CARES Act and clarified that liquidity needs are not limited to only natural person credit unions, but may also include those of corporate credit unions or a corporate credit union group. This amendment was scheduled to sunset in accordance with the CARES
Act on December 31, 2020. The CAA
extended this provision in the CARES
Act until December 31, 2021.5 As such, the Board is clarifying that the regulatory definition of Liquidity needs to make it clear when the definition under the CARES Act applies and when such definition reverts back to the pre-CARES Act version.
B. Agent Membership In accordance with the CARES Act, the Board amended the nature of the requirement for a corporate credit union or group of corporate credit unions to subscribe to the capital stock of the Facility in an amount equal to one-half of 1 percent of the paid-in and unimpaired capital and surplus of all of the corporate credit unions or corporate credit union groups natural person credit union members. This change, which mirrors the statutory change in the CARES Act, allows the Board, in its sole discretion, to determine which grouping of natural person member credit unions of the applying corporate credit union or corporate credit union group are considered covered by the Agents membership in the Facility. In 4 Consolidated Appropriations Act, 2021, Public Law 116260, 134 Stat 1182 December 27, 2020.
5 Consolidated Appropriations Act, 2021, Public Law 116260, 134 Stat 1182, section 540a December 27, 2020.

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turn, this approved group is the basis for calculating the amount of Facility capital stock the corporate credit union or corporate credit union group is required to purchase. This amendment was scheduled to sunset in accordance with the CARES Act on December 31, 2020. The CAA extended this provision in the CARES Act until December 31, 2021.6 As such, the Board is making a conforming date change to part 725
through this interim final rule.
Upon the sunset of the amendment made in the CARES Act, as extended by the CAA, any corporate credit union or corporate credit union group that became an agent member under this provision must, within one year from the sunset date, either:
1. Purchase Facility stock for all of its member credit unions; or 2. terminate its membership in the Facility.
The Board notes that these are the options that the Board included in the April interim final rule. Further, the Board is, as noted above, only changing the sunset date, and not making any substantive changes to this or other sections of part 725.
C. Agent Member Borrowing To effectuate the intent of the CARES
Act in a safe and sound manner, the Board, in the April interim final rule, made a clarifying amendment to 725.4.7 This amendment clarified that an agent member may borrow from the Facility for its own liquidity needs, but, to do so, such agent must first subscribe to the capital stock of the Facility in an amount equal to one-half of 1 percent of the Agents own paid-in and unimpaired capital and surplus.8 In addition, the Board amended 725.17b2 to clarify that an agent may apply for a Facility advance based on its own liquidity needs.
The Board notes that the foregoing amendments were scheduled to sunset in accordance with requirements of the CARES Act on December 31, 2020. The CAA extended the related provisions in the CARES Act until December 31, 2021.9 As such, the Board is making a conforming date changes through this interim final rule.
The April interim final rule included language to clarify the ramifications of the sunset of this provision.
6 Id.
7 85

FR 23731 Apr. 29, 2020.
credit union is required to pay into the Facility one-half of the amount required by the regulations and to hold the other one-half in liquid assets on its balance sheet.
9 Consolidated Appropriations Act, 2021, Public Law 116260, 134 Stat 1182, section 540a December 27, 2020.
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Specifically, the April interim final rule provided that upon sunset of this provision, an agent must:
1 Not request any additional Facility advances for its own liquidity needs;
and 2 continue to follow the terms of the Facility advance agreement entered into between the agent and the Facility.
The Board is not making any changes to the aforementioned provisions, which will still apply upon the sunset of the changes to these sections of part 725.
In addition, in the April 2020 interim final rule, the Board made cohering changes to 725.17 and 725.18 to include the ability of an Agent to borrow for its own liquidity needs.10
This rule makes technical changes to the two aforementioned sections to clarify that the references to an Agent borrowing for its own liquidity needs sunset on December 31, 2021.
D. Termination of Membership In the April interim final rule, the Board amended the waiting periods for a credit union to terminate its membership in the Facility between the effective date of the interim final rule and January 1, 2022.11 The amendments to this section of part 725 temporarily permitted a credit union, regardless of its percentage amount of stock subscription, to withdraw from membership in the Facility after notifying the NCUA Board in writing on the sooner of:
A Six months from the date of its written notice to the NCUA Board; or B December 31, 2020.
Further, any credit union that remained a member after December 31, 2020, was permitted to withdraw from membership immediately upon notifying the Board in writing of its intent to do so. Per the April interim final rule, such immediate withdrawal period would expire on December 31, 2021. After December 31, 2021, the termination requirements in effect prior to the enactment of the CARES Act would be reinstated and apply to all members.12
The Board is making several conforming amendments to this section to address the extension of the CLF
provisions in the CARES Act by the CAA. First, any credit union that joined the CLF between April 29, 2020 and December 31, 2020 may immediately withdraw from membership upon notifying the Board in writing of its intent to do so. Through this interim final rule, the Board is extending this 10 85

FR 23731 Apr. 29, 2020.

11 Id.
12 Id.

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