The requirement would “ensure that such credit unions have entered into the necessary agreements and possess the appropriate amount of eligible collateral to meet their liquidity needs in a variety of stress scenarios,” the presidents wrote.

However, the letter continued that the banks are working with the NCUA to draft a memorandum of understanding regarding the banks' role in providing liquidity to credit unions, including in times of stress.

“We believe that such a memorandum will help ensure that credit unions have regular and emergency access to liquidity, as well as to ensure that resolutions of troubled FHLBank members are carried out in a manner that meets the goals of both the NCUA and the FHLBanks,” the letter said.

The MOU would “establish a framework for dealing with insolvent and financially troubled institutions” even in times of systemic crisis. The letter identified Director of Government Relations Eric Mondres and General Counsel Reggie O'Shields from the Federal Home Loan Bank of Atlanta as those who would be working with NCUA staff on finalizing the MOU.

CUNA Deputy Counsel Mary Dunn said during a Monday press call that because credit unions feel so strongly that the banks should be an emergency funding option and have made their feelings known to the NCUA, the agency “doesn't want to totally dismiss out of hand using Federal Home Loan Banks.”

Dunn said she thinks the issue could be worked out with the MOU.

“The NCUA is taking a look at that,” she said. “Whether they will allow it, though, is questionable at this point.”