The Monday announcement included a reminder to credit unions about their emergency liquidity needs. The demise of Kansas-based U.S. Central means thousands of credit unions and their corporates no longer have the CLF as a source of backup liquidity, unless they join the CLF directly.

“We now have a stronger, safer system,” Matz said. “We have set high standards for corporate credit union investments, capital and governance, and we’ve created a new operating environment for wholesale corporate credit unions to serve retail credit unions. The decisions NCUA and credit unions made have produced a solid foundation for the future.”

U.S. Central was founded in 1974 and became the largest of the corporate credit unions before it was conserved by the NCUA in March 2009 after it was wracked with losses from the purchase of faulty mortgage based securities. It became U.S. Central Bridge in October 2010 in an effort to keep its services going.

The NCUA has settled for $170 million with three of the Wall Street firms that sold the toxic MBS and has sued seven more. The NCUA Board also issued a proposed rule to require credit unions to plan for emergency liquidity and said it now is reviewing the 45 comments it has received on that measure.

The rule would require credit unions with more than $100 million in assets to establish their own capitalized ownership in the CLF, or gain access to the Federal Reserve’s Discount Window, despite the industry being flush with liquidity due to low loan demand.

“Credit unions have access to everyday liquidity needs through their balance sheet, and through correspondent relationships such as corporates or Federal Home Loan Banks,” Matz said in Monday’s statement.

“But in the event of another systemic crisis, it is also critical for larger credit unions to have demonstrated access to a dependable source of government-backed emergency liquidity, such as NCUA’s CLF or the Federal Reserve Discount Window. That’s why the NCUA Board proposed the emergency liquidity rule,” she said.