Debt Obligations of the National Credit Union Administration

D ebt obligations of the National Credit Union Adm inistration, lawfully incurred on behalf of the 

Central Liquidity Facility, pursuant to 12 U S.C § 1795f(a), represent obligations of the United 

States backed by its full faith and credit.

T here is a presum ption, historically reflected in opinions of the Attorney General, that federal agency 

obligations are supported by the full faith and credit of the United States, unless the statute 

authorizing such obligations expressly provides otherw ise. This presumption extends to obligations incurred by an agency on b eh alf of a non-federal entity.

W hile principles of restraint and respect for the C om ptroller General as an agent of Congress 

ordinarily require that his opinions be accorded substantial weight by the Attorney G eneral, in this 

case the C om ptroller General failed properly to apply the legal principles governing full faith and 

credit w hich are delineated in the opinions of the Attorney General.

O pinions of the A ttorney General on m atters of law are, as a matter of course, to be followed by all 

officers o f the E xecutive Branch.

May 24, 1982

MEMORANDUM OPINION FOR THE PRESIDENT, CENTRAL 

LIQUIDITY FACILITY, NATIONAL CREDIT UNION ADMINISTRATION

This responds to your request for an opinion concerning debt obligations to be 

issued by the National Credit Union Administration (NCUA) on behalf of the 

Central Liquidity Facility (CLF or Facility) pursuant to 12 U.S.C. § 1795f(a) 

(1982). The NCUA is considering issuing these obligations for the CLF in order 

to fund the latter’s lending activities. Previous to this request, you received an 

opinion from the Comptroller General of the United States' regarding NCUA’s 

authority to issue these debt securities. That opinion stated that the NCUA has 

authority to issue debt securities on behalf of the CLF, but that these securities 

would not constitute obligations of the United States supported by its full faith 

and credit. Because the Comptroller General’s opinion may impair the CLF’s 

ability to perform its lending function, you have asked us to review the full faith 

and credit questions,2 and to address additional questions that have arisen as a

1 C om p. G en. D ec., File: B -204227 (O ct. 2 1 , 1981) (hereinafter Comp. G en Dec.).

2 Since 1973, it has been the policy of the D epartm ent of Justice to decline to issue formal opinions on full faith 

and credit m atters unless there is drawn into question a genuine issue of law. See Elliot L. R ichardson, Attorney 

G eneral, M em orandum for H eads of the Executive D epartm ents and C ounsel to the President (Oct 10, 1973). In 

this case we find both a substantial issue of law , and a m isapplication by the Com ptroller G eneral of a series of 

opinions o f the A ttorney G eneral which treat th e obligations o f the United States Therefore we have decided to 

address th e full faith and credit issue you present.

262
result of the Comptroller General’s opinion.3

We find—contrary to the Comptroller General’s opinion4— that lawful debt 

obligations of the NCUA incurred on behalf of the CLF represent obligations of 

the United States backed by its full faith and credit.

I.

The Central Liquidity Facility was established in 1978 by the National Credit 

Union Central Liquidity Facility Act (CLF Act), Pub. L. No. 95-630, Title 

XVIII, codified at 12 U.S.C. § 1795 (1982). The CLF’s function is to provide for 

the “ liquidity needs” of member credit unions.5 The CLF “ exist[s] within” the 

National Credit Union Administration6 and is managed by the NCUA Board. 12 

U.S.C. § 1795b. Credit unions may become “ members” of the CLF by subscribing to, and holding, CLF capital stock. 12 U.S.C. §§ 1795c, 1795d. Member 

credit unions are entitled to apply for credit advances, 12 U.S.C. § 1795e(a)(l), 

but they have no control over, or management responsibilities for, the CLF.

The Facility’s lending activity is funded through its capital stock and through 

borrowing. To date, all borrowing for the CLF has been from the Federal 

Financing Bank, a corporate instrumentality within the Department of the 

Treasury.7 Recently, however, the CLF was requested by the Office of Management and Budget to develop plans to borrow in the private capital markets.8 The 

CLF lacks the power to borrow from any source, but the CLF Act provides clear 

authority for the NCUA Board to incur obligations on its behalf.

The Board on behalf of the Facility shall have the ability to— 

*****

(4) borrow from— (A) any source, provided that the total face

3 These questions concern the C L F ’s possible exposure to liabilities arising from other NCUA activities. For 

exam ple, you ask our concurrence in your General C ounsel’s determ ination that hypothetical claim ants against the 

National Credit Union Share Insurance Fund might look only to the assets of the Fund for satisfaction o f their claim s. 

We believe our resolution o f the full faith and credit issue m akes it unnecessary to address these additional 

questions

4 Principles of restraint and respect for the authority o f the C om ptroller G eneral as an agent of C ongress require 

that his opinions be accorded substantial weight by the Attorney G eneral See. e g., 41 Op. A tt’y G en. 507, 512 

(1960); 41 O p A tt’y G en. 463, 473 (1960). However, disagreem ents som etim es do occur, see, e.g., 41 Op. A tt’y 

G en. 507 (1960); 37 O p A tt’y G en 559 (1934), 37 Op. A tt'y G en. 562 (1934), and in this case we believe the 

C om ptroller Genera! failed properly to apply the presum ption governing full faith and credit m atters which is 

delineated in the opinions of the A ttorney G eneral. These opinions are, as a m atter of course, to be followed by all 

officers of the Executive Branch See 37 O p A tt’y G en. 562, 563 (1934); 20 O p A tt’y G en. 648 (1893) See

generally 28 U S .C . § 512; Smith v Jackson, 241 Fed 747, 773 (5th Cir. 1917), q jfd , 246 U .S . 388 (1918).

5 The statutory definition o f “ liquidity needs’’ was designed to restrict the CLF to lending only for the purpose of 

providing traditional credit unions— as distinct from corporate central credit unions— w ith credit to m eet em ergency outflows resulting from m anagem ent difficulties, local econom ic dow nturns, seasonal credit needs, or regional 

econom ic decline. See 12 U .S C . § 1795a(l), 124 C ong Rec 38842 (1978) (rem arks of Rep St Germain). T he 

C LF is prohibited from providing credit the purpose o f which is “ to expand credit union portfolios.” 12 U .S .C 

§ 1795e(a)(l)

6 The NCUA is “ established in the executive branch” as “ an independent agency,” 12 U .S.C . § 1752a(a), and is 

managed by a three-m em ber Board “ appointed by the President, by and with the advice and consent o f the Senate.” 

12 U S .C § 1752a(b).

1 See generally 12 U .S .C §§ 2 2 81-2296 (1982).

8 This inform ation was contained in your opinion request. See also Department c f Housing and Urban

Development—Independent Agencies Appropriations fo r 1982, Hearings Before a Subcommittee c f the House

Committee on Appropriations, 97th C o n g ., 1st Sess. 311 -1 2 (Feb. 5, 1981) (testim ony of Lawrence Connell, 

Chairm an, NCUA) (expressing wish to end reliance on borrow ing from Federal Financing Bank).

263
value of these obligations shall not exceed twelve times a subscribed capital stock and surplus of the Facility[.]

12 U.S.C. § 1795f(a). The issue to be resolved is whether this language provides 

full faith and credit backing for NCUA obligations incurred on behalf of the 

Facility.

II.

It has long been the position of the Attorney General that when Congress 

authorizes a federal agency or officer to incur obligations, those obligations are 

supported by the full faith and credit of the United States, unless the authorizing 

statute specifically provides otherwise.

[T]here is no order of solemnity of valid general obligations of the 

United States and. . . no legal priority is afforded general obligations contracted pursuant to an express pledge of faith or credit 

over those not so accompanied. It is enough to create an obligation 

of the United States if an agency or officer is validly authorized to 

incur such obligation on its behalf and validly exercises that 

power.

41 Op. Att’y Gen. 403,405 (1959). See a/so 42 Op. Att’y Gen. 341, 344 (1967);

41 Op. Att’y Gen. 424, 430 (1959). See generally Perry v. United States, 294 

U.S. 330, 353-54 (1935); Lynch v. United States, 292 U.S. 571, 580 (1934). 

Thus,

a guaranty by a Government agency contracted pursuant to a 

congressional grant of authority for constitutional purposes is an 

obligation fully binding on the United States despite the absence 

of statutory language expressly pledging its “ faith” or “ credit” to 

the redemption of the guaranty and despite the possibility that a 

future appropriation might be necessary to carry out such 

redemption.

42 Op. Att’yGen. 21, 23-24(1961). See also 420p. Att’yGen. 429,432(1971); 

42 Op. Att’y Gen. 327 (1966); 42 Op. Att’y Gen. 305, 308 (1965); 42 Op. Att’y 

Gen. 183, 184 (1963).

The presumption that federal agency obligations are supported by the full faith 

and credit of the United States absent statutory language to the contrary was 

explicitly declared by the Attorney General in an opinion holding that the Small 

Business Administration had authority to guarantee the sale of certain debentures 

owned by it:

[T]he threshold question concerning the effect of proposed SBA 

guaranties is not whether the statutory language expressly alludes 

to the “ faith” or “credit” of the United States, but whether the 

statutory scheme authorizes the guaranties here proposed. If there

264
is statutory authority for the guaranties, absent specific language

to the contrary such guaranties would constitute obligations of the 

United States as fully backed by its faith and credit as would be 

the case were those terms actually used.

(Emphasis added.) Letter from John N. Mitchell, Attorney General, to Thomas 

S. Kleppe, Administrator, Small Business Administration, at 3—4 (April 14, 

1971) (hereafter “Kleppe letter”). See also 42 Op. Att’y Gen. 327, 328 (1966) 

(presumption applies not only to guarantees, but to any other “ contractual 

liabilities” an agency is authorized to incur); 41 Op. Att’yGen. 363, 369(1958).

The presumption favoring full faith and credit support for federal agency 

obligations rests on a solid foundation of reason and equity. When a federal 

agency enters the marketplace and lawfully incurs debts, the public which 

becomes its creditor has a right to expect that, unless notified to the contrary, the 

agency’s obligations will be supported by the government which created it and 

which considers it a constituent part. Requiring investors to guess the wishes of 

Congress in this area would be to require them to guess about the key feature of 

this type of investment: the security of government debt obligations. Furthermore, the government’s interest in obtaining advantageous credit terms is promoted when the public justifiably assumes that, unless Congress has clearly 

provided otherwise, federal agency obligations are obligations of the United 

States government, not merely those of a single agency supported by its limited 

assets or periodic appropriations. For these reasons, we believe that when 

Congress authorizes federal agencies to incur obligations without placing specific restrictions on their backing, it does so in accordance with the presumption 

established in the opinions of the Attorney General.9

The borrowing authority at issue here, 12 U.S.C. § 1795f(a), nowhere expressly limits recourse for NCUA obligations to the resources of the CLF, the 

NCUA, or the two of them; nor can any such limitation reasonably be inferred. 

We therefore find that debt obligations of the NCUA incurred on behalf of the 

CLF pursuant to this provision are supported by the full faith and credit of the 

United States.

III.

Our conclusion is based not only upon application of the full faith and credit 

presumption to the particular terms of the NCUA’s borrowing provision; it is 

bolstered by the structure and language of that section as a whole. Examination of 

§ 1795f(a) reveals that when Congress wished to place restrictions on Board 

obligations, it did so explicitly. Although not conclusive, we believe the maxim

9 Evidence that C ongress groups all lawful obligations of federal agencies together with obligations explicitly 

backed by the full faith and credit of the U nited States, and not with obligations incurred pursuant to statutes w hich 

expressly prohibit any guarantee by the U nited States, is found in 1 2 U .S C § 2286(a). That section provides that 

the Secretary of the Treasury must approve the m ethod, source, tim ing, and financing terms of all “ obligations 

issued or sold by any Federal agency; except that the approval of the Secretary of the Treasury shall not be required 

with respect to (A) obligations issued o r sold pursuant to an Act of Congress w hich expressly prohibits any 

guarantee o f such obligations by the U nited Slates. ..."

265
expressio unius est exclusio alterius is applicable here.10 First, Congress showed 

an intention to limit the obligations which the Board could incur on behalf of the 

Facility by limiting the value of those obligations to twelve times the stock and 

surplus of the Facility.11 12 U.S.C. § 1795f(a)(4). Notably, however, the backing

for such obligations is not similarly limited.

More significant is the congressionally mandated limitation on guarantees 

which the Board may provide for financial obligations of member credit unions 

12 U.S.C. § 1795f(a)(5) provides:

The Board on behalf of the Facility shall have the ability to—

(5) guarantee performance of the terms of any financial obligation 

of a member but only when such obligation bears a clear and

conspicuous notice on its face that only the resources cf the

Facility underlie such guarantee[.]

(Emphasis supplied.) Had Congress intended similarly to limit NCUA debt 

obligations, we believe it would have included similar language in § 1795f(a)(4).

Finally, we believe a comparison between this provision and similar provisions 

governing the Federal Home Loan Bank system (FHLB) sheds light on this 

problem. The statute governing the FHLB is instructive because the CLF was 

created to serve the liquidity needs of credit unions in the same manner that the 

FHLBs serve savings and loan institutions.12 Federal Home Loan Banks are 

authorized to “ issue debentures, bonds, or other obligations upon such terms and 

conditions as the [FHLB] board may approve[.]” 12 U.S.C. § 1431(a) (1982). 

However, the FHLB statute goes on explicitly to limit the backing for FHLB 

obligations: “All obligations of Federal Home Loan Banks shall plainly state that 

such obligations are not obligations of the United States and are not guaranteed by 

the United States.” 12 U.S.C. § 1435. Although in many ways Congress 

modeled the CLF’s powers and functions after those of the FHLB,13 it omitted 

from the CLF Act any provision similar to 12 U.S.C. § 1435. We therefore 

hesitate to infer a restriction on the backing of NCUA obligations where the 

statute is completely silent on the matter.

IV.

As already noted above, the Comptroller General concluded that NCUA 

obligations incurred on behalf of the CLF would not be backed by the full faith

10 See generally TVA v. Hill, 437 U.S. 153, 188(1978), N at’ I Railroad Passenger Corp v Nat'I Ass’n ofRailroad

Passengers. 4 I 4 U .S . 4 5 3 , 458 (1974); Nashville Milk Co. v. Carnation Co.. 355 U S 373, 376 (1958); Duke v. 

Univ. o f Texas, 663 F.2d 522, 526 (5th Cir 1981) (all cases applying maxim ); 2A , C Sands, Statutes and Statutory

Construction § 47 23 (4th ed. 1973).

11 T his restriction may have been included not only to m ake the facility's size more reasonable in relation to the 

credit union in d u stry ’s assets, but also to lim it the exposure of the governm ent in the event o f default Cf. Community

Credit Needs, Hearings Before Subcomm. on Financial Institutions Supervision, Regulation and Insurance, c f the

House Committee on Banking, Finance and Urban Affairs, 95th Cong , 2d Sess. 208 (testim ony of Phillip Jackson, 

Fed. R eserve B d.) (hereinafter Comm unity Credit Needs Hearings).

12 See id. at 319, 329, 424; 124 Cong R ec 2421 (1978) (rem arks o f Rep. St G erm ain), 124 Cong Rec 30904 

(1978) (rem arks o f Sen. Proxmire)

” /d.

266
and credit of the United States. This conclusion was based upon a careful and 

thorough search through the legislative history of 12 U.S.C. § 1795f(a) to find 

some hint of congressional intentions. We believe, however, that this search was 

largely unnecessary, and reached an incorrect conclusion.

The Comptroller General’s opinion began by recognizing “ the presumption of 

full faith and credit which, at least initially, is accorded to a Government 

agency. . . .” 14 The opinion also cited and expressed agreement with the holdings of the various Attorney General opinions which delineate this presumption.15 The Comptroller General believed, however, that this presumption was 

inapplicable because “ the agency involved [i.e., the NCUA] is acting not on its 

own behalf but on behalf of a mixed-ownership Government corporation, albeit 

one established within the parent agency.” Finding this to be a “critical distinction,” the opinion stated that the full faith and credit presumption “ does not 

necessarily apply to a mixed-ownership Government corporation.” 16

We find that the Comptroller General misapplied the presumption articulated 

in the Attorney General opinions favoring full faith and credit. Assuming 

arguendo that the presumption “ does not necessarily apply to a mixed-ownership 

Government corporation,” this does not preclude its application here, because 

the CLF does not incur obligations. It is the NCUA which incurs the obligations 

under 12 U.S.C. § 1795f(a), and the NCUA is an independent agency within the 

Executive Branch.17 We do not understand the Comptroller General to contest the 

application of the presumption to independent agencies within the Executive 

Branch. See, e.g., 41 Op. Att’y Gen. 403 (1959)18 (ICC guarantee constitutes an 

obligation of the United States even though the statutory authority for guarantee 

does not contain language pledging faith or credit of the United States, and 

notwithstanding lack of an existing appropriation).

Moreover, once it is determined that a federal agency has authority to incur 

obligations, it is immaterial to the full faith and credit question that the obligation 

may be incurred “ on behalf of” some other body or person.19 Numerous 

Attorney General opinions treat government obligations incurred “on behalf of” 

non-federal entities. That fact has never played any part in a determination of the 

full faith and credit issue.20 The presumption recognized by the Comptroller

14 C om p G en. Dec , supra note I, at 4.

15 Id.

16 The C LF appears as a “ m ixed-ow nership G overnm ent corporation” in 31 U .S .C . § 9101(2)(G ) (1982)

17 See note 6, supra

18Cited in Com p G en Dec . supra note I, at 4.

19 At m ost, this fact may be relevant in determ ining w hether a particular obligation of an agency is lawful, not 

w hether it is backed by the full faith and credit o f the U nited States

20 See, e g., 42 O p A tt'y G en 429 (1971) (Export-Im port Bank guarantee of Private Export Funding Corp. 

obligations); 42 O p A tt’y G en. 341, 344 (1967) ("[In] a series o f opinions of the Attorneys General it was held 

that a Federal agency’s guaranty o r equivalent support of certain debt obligations c f a local Government agency or

private person to the holders thereof would be backed by the full faith and credit o f the United States” ) (em phasis 

supplied), 42 Op. A tt’y G en 305, 308(1965) (“the United States may becom e liable upon its undertaking to buttress 

another’s obligation w hether o r not the governing statute uses language specifically confirming such liability” ) 

(em phasis supplied); 42 O p A tt’y Gen 183 (1963) (A ID guarantees to U .S. citizens and enterprises in respect of 

investments made in foreign countries), 42 Op. A tt’y G en 21 (1961) (D evelopm ent Loan Ftind guarantees to private 

investors with respect to loans “ contributing to the econom ic progress” o f foreign nations), 41 O p A tt’y G en. 424 

(1959) (guarantee o f housing m ortgages for military personnel).

267
General favoring full faith and credit “ absent specific language to the contrary” 21 

should therefore have been applied to the obligations of the NCUA under 12 

U.S.C. § 1795f(a).

It was unnecessary for the Comptroller General to attempt to divine congressional intent through an exhaustive examination of the legislative history of 

12 U.S.C. § 1795f, because the policies underlying the presumption would be 

frustrated if liability for federal agency obligations could be limited simply by 

reference to obscure statements made in subcommittee hearings or the like.22 For 

this reason many determinations of full faith and credit matters by the Attorney 

General have been made without reference to legislative history.23

However, because the Comptroller General found the legislative history of 12 

U.S.C. § 1795f(a) to be controlling, we have carefully reviewed that history and 

found it to be, at best, inconclusive. The legislative history nowhere reveals any 

clear statement one way or the other regarding congressional intent concerning 

full faith and credit for NCUA obligations. The following two sections discuss 

the Comptroller General’s legislative history argument and post-enactment 

evidence.

A. The Deletion of Language Providing fo r NCUA Authority to Borrow

“ With or Without the Guarantee cf the United States.”

The initial version of the title establishing the CLF was approved by the Senate 

on October 12, 1978, when it passed its own version of H.R. 14279,24 the bill 

which ultimately became Pub. L. No. 95-630. As initially passed by the Senate, 

the CLF borrowing provision read as follows:25

The Administrator on behalf of the Facility shall have the authority 

to—

jje Jfc

(4) Borrow from—(A) any source with or without the guarantee c f the United States a s to principal and interest. The total face 

value of those obligations guaranteed by the United States shall 

not exceed twenty times the subscribed capital stock and surplus 

of the Facility[.]

Thus just three days before the CLF statute was sent to the President for signature 

the Senate had approved language explicitly providing government guarantees 

for NCUA borrowing.26

21 K leppe letter, supra p 5

22 We are not faced w ith a question raised by a statute w hose term s do not lim it full faith and credit, but whose 

legislative history explicitly and plainly evinces a congressional intention to do so See text im m ediately infra.

23 See, e.g . 42 O p A tt’y G en. 429 (1971); 4 2 Op. A tt’y G en. 417 (1969); 42 Op. A tt’y G en. 327 (1966); 42 Op. 

A tt’y G en. 305 (1965); 41 Op. A tt’yGen 403 (1959); 41 Op. A tt'y G en 363 (1958). a/so 42 O p A tt’y G en 323 

(1966) (finding unpersuasive certain legislative history opposing application o f full faith and credit; see note 36 

infra). Cf. 42 Op. A tt’y G en. 183 (1963); 4 2 O p A tt’y G en 21 (1961): 41 Op. A tt’y G en 424 (1959)

24 95th C o n g ., 2d S ess. (1978). See 124 C o ng. Rec. 3 6120, 3613 4 -3 6 (O ct. 12, 1978).

25 124 C ong. Rec. 36135 (O ct. 12, 1978) (em phasis supplied).

26 A s the C om ptroller G eneral notes, this initial version o f the C LF borrow ing provision was identical to that 

contained in a num ber o f bills to establish the C L F that had been considered by both Houses of Congress. See, e g ,

S 3499, 95th C o n g ., 2d Sess (1978); H R . 11310, 95th C o n g ., 2d Sess (1978) These bills unam biguously 

authorized a governm ent guarantee for N C U A debts incurred on behalf o f the facility. As the Senate Report 

accom panying S. 3499 explained, “ fu]p to 20 times the paidin capital may be borrow ed utilizing a Federal 

governm ent guarantee ’’ S. Rep. No 1273, 9 5th C ong., 2d Sess. 6 (1978).

268
Action in the House was more ambiguous. On October 14, 1978, the House 

concurred in the Senate’s amendments to H.R. 14279, but substituted a House 

Banking subcommittee’s language regarding the establishment of the Central 

Liquidity Facility.27 The House debate on October 14th did not explain the 

purpose of this substitution. On the following day the House substitute was 

concurred in by the Senate,28 and it was this language which became law when 

signed by the President on November 10, 1978.

The House language adopted on October 14, 1978, originated as Title III of 

H.R. 14044, 95th Cong., 2d Sess. (1978). Although reported out of the Subcommittee on Financial Institutions Supervision, Regulation and Insurance on September 22, 1978, the House Banking Committee did not complete consideration 

of this bill before adjournment, and no committee report explaining the CLF 

provisions was written. On November 9, 1978, over three weeks after final 

congressional action had occurred, Subcommittee Chairman St Germain inserted into the Congressional Record language which he said “ would have been 

included in the House report on this significant title.” 29 This would-be report on

H.R. 14044 provides no evidence of any intention to deny full faith and credit 

support to the debt obligations of the NCUA.30

The Comptroller General insists, however, that an investigation into the origins 

of H.R. 14044 reveals an intention by the House to deny full faith and credit to 

NCUA obligations. In introducing H.R. 14044, Rep. St Germain provided the 

following explanation of the CLF provisions in the bill.

Title III [of H.R. 14044] establishes a central liquidity facility for 

credit unions and is almost identical to H.R. 11310 [95th Cong.,

2d Sess. (1978)]. The changes [from H.R. 11310] reflect suggestions made by National Credit Union Administrator Lawrence 

Connell, Gov. Phillip Jackson of the Board of Governors of the 

Federal Reserve System and others during subcommittee hearings. The changes are:

j}; Jfc ♦ 4:

Sixth. Revised borrowing authority to limit the total amount of 

such borrowing to twelve times capital stock and surplus of the 

facility. The 12 would apply whether the borrowings have a

Government guarantee or not. This is comparable to the borrowing authority for other Federal Government entities.31

124 Cong. Rec. 28805 (1978) (emphasis supplied).32

27 124 Cong Rec 3 8 2 8 7 ,3 8 3 1 1-13 (1978)

28 124 Cong. R ec S 19146 (O ct 15, 1978)

» 124 Cong Rec 38842-43 (1978)

30 The only rem ark relevant to N C U A ’s borrow ing authority states, “ Finally, the Adm inistrator is authorized to 

issue debt obligations on behalf of the facility, in a total face value not exceeding 12 times the subscribed capital 

stock and surplus o f th e facility” 124 C ong. R ec. 38843 (1978)

31 Rep. St G erm ain was probably referring to a com parable requirem ent that FHLB borrow ing be limited to 12 

times its capital and reserves. 12 C .F R § 506 1.

32 The C om ptroller G eneral acknowledges that ‘‘at first glance” Rep St G erm ain’s remarks m ight suggest that 

under the revised language CLF borrow ings would be covered by a governm ent guarantee We agree

269
In order fully to understand the meaning of the underlined sentence, we must 

refer to the original provisions of H.R. 11310, which permitted the Administrator, on behalf of the Facility, to borrow from

any source with or without the guarantee of the United States as to 

principal and interest. The total face value of those obligations

guaranteed by the United States shall not exceed 20 times the 

subscribed capital stock and surplus of the Eacility[.]33

(Emphasis added.) H.R. 14044 altered H.R. 11310 in two respects: (1) it 

restricted the total amount of NCUA borrowing authority to twelve times the 

capital stock and surplus of the Facility; and (2) it specified that this lower limit 

would apply, in Rep. St Germain’s words, “ whether the borrowings have a 

Government guarantee or not.” Rep. St Germain’s comments do not reveal any 

intention to eliminate government guarantees, but merely to limit the maximum 

amount the NCUA could borrow by issuing government guaranteed obligations.

The Comptroller General disagrees, and finds that Rep. St Germain’s changes 

in H.R. 14044 reflect suggestions made by Phillip Jackson, a member of the 

Federal Reserve Board of Governors, in hearings before the Congressman’s 

subcommittee. In his testimony, Mr. Jackson proposed two amendments to H.R. 

11310:34

The [Federal Reserve] Board has discussed a few modifications 

and clarifications to the proposed legislation with the National 

Credit Union Administration. During those discussions, the Administrator of the NCUA indicated that he agrees that these 

changes would improve the bill. One amendment would clarify 

that the private borrowings of the facility would not have the U.S. 

Government’s guarantee. Another would reduce the borrowing 

leverage on capital to ten times capital, which would make the 

facility’s size more reasonable in relation to industry assets.

There are three reasons why we believe the Comptroller General’s reliance 

upon Mr. Jackson’s suggestions is misplaced. First, statements made in congressional hearings by witnesses are generally accorded little weight in construing statutes.35 This is especially so in this instance, where the witness’s 

remarks about full faith and credit were cursory and failed to address the 

substantial body of precedent in this area found in the opinions of the Attorney 

General.36

33 H .R . 11310, § 307, reprinted in C om m unity C redit Needs H earings, supra note 11, at 364, 371-72 (em phasis 

supplied).

34 See C om m unity C redit N eeds H earings, supra note 11, at 208

35 See McCaughn v. Hershey Chocolate C o , 283 U S. 488, 4 9 3 -9 4 (1931); Austasia fntermodal Lines, Ltd v 

FMC, 580 F.2d 6 42, 645 (D C . Cir 1918); March v. United Slates, 506 F 2d 1306, 1314 & n .3 0 (D C .C ir 1974); 

United States v Fairfield Gloves, 558 F.2d 1023, 1027 (C C .P A 1977)

36 In 4 2 O p A tt’y G en 323 (1966), the A ttorney General held that guarantees by the Federal National M ortgage 

A ssociation o f certain “ participation certificates” gave nse to general obligations of the U nited States. The opinion 

recognized that contrary statements were to be found in the legislative history asserting that the M ortgage 

A ssociation’s guarantees were not backed by the full faith and credit of the United States T he Attorney General 

discounted these statem ents, in part because the full faith and credit opinions of the Attorney G eneral “ were not 

brought to the attention of the witnesses and com m ittee m em bers during the cited hearings, [and] it appears that the 

persons m aking the statem ents I have referred to did not take them into account.” Id. at 324

270
Second, Mr. Jackson’s remarks were partially inaccurate, and his suggestions 

were not all incorporated into H.R. 14044, the bill that was eventually adopted. 

For example, contrary to Mr. Jackson’s declaration that the NCUA endorsed his 

suggestions,37 the NCUA Administrator specifically objected to Jackson’s proposals, noting that “ [Jackson’s proposal] significantly reduces the CLF’s lending 

capacity and NCUA cannot accept it. . . .” 38 In addition, Mr. Jackson’s recommendation to reduce the borrowing leverage of the CLF to ten times capital was at 

best only partially reflected in H.R. 14044, where the limit was revised to 12 

times capital. Under these circumstances, Mr. Jackson’s testimony cannot be said 

to have had a determinative effect on the outcome of the CLF provisions.

We note, finally, that no Member of Congress and no committee report 

confirms Mr. Jackson’s views regarding full faith and credit backing for NCUA 

obligations. In fact the only evidence that Mr. Jackson had any effect whatever on 

the outcome is found in Rep. St Germain’s statement that H.R. 14044 reflects 

“ suggestions made by National Credit Union Administrator Lawrence Connell, 

Gov. Phillip Jackson of the Board of Governors of the Federal Reserve System 

and others during subcommittee hearings.” 39 The most reasonable interpretation 

of this remark— and of the changes made in H.R. 11310 resulting in H.R. 

14044— is that the drafters took account of both Mr. Jackson’s and Mr. Connell’s 

suggestions and limited the borrowing authority and limited similarly the liability of the United States to 12 times capital. We find no indication that the 

drafters of H.R. 14044 intended to remove completely the government’s backing 

for NCUA obligations.40

B . Post-enactment Remark in Senate Appropriations Committee Report.

In addition to reviewing the legislative history of § 1795f(a), the Comptroller 

General cites the following brief remark from a Senate Appropriations Committee report written subsequent to enactment of the CLF Act:

The principal source of funds for the lending operations [of the 

CLF] are the stock subscriptions by credit unions and the sale of 

obligations by the facility. These obligations are not guaranteed 

by the U.S. Government as to either principal or interest.41

This post-enactment remark lacks any support or accompanying analysis, and it 

was written by a committee which had no responsibility for drafting the Act it

37 See note 34, supra

38 Com m unity Credit N eeds H earings, supra note 11, at 345.

39 124 C ong. Rec 28805 (1978).

40 Furtherm ore, as a general matter

[we] must exercise caution before draw ing inferences regarding legislative intent from changes made 

in com m ittee w ithout explanation Although a succession of d raft bills may point toward a clear 

legislative purpose, am endm ents to a bill's language are frequently latent with am biguity: they may 

either evidence a substantive change in legislative design or sim ply a better m eans for expressing a 

provision in the original bill.

Western Coal Traffic League v United States, 677 F.2d 915, 924, cert, denied, 459 U .S . 1086 (1982) (citations 

omitted).

41 S. Rep No 258, 96th C ong., 1st Sess. 63 (1979).

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was describing. Such post-enactment statements are not entitled to substantial 

weight. See Mathews v. Weber, 423 U.S. 261,272 n.7 (1976); Dawson v. Myers,

622F.2d 1304, 1312 (9th Cir. 1980), vacated on other grounds, 101 S. Ct. 1961

(1981).

We therefore conclude that obligations of the NCUA incurred on behalf of the 

Central Liquidity facility pursuant to 12 U.S.C. § 1795f(a) are supported by the 

full faith and credit of the United States.

T h e o d o r e B . O l s o n

Assistant Attorney General

Office of Legal Counsel

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