WASHINGTON (12/16/15)--The Federal Deposit Insurance Corp. (FDIC) announced Tuesday it reduced its 2016 budget by 4.7% from 2015, which stands in stark contrast to the National Credit Union Administration raising its budget 4.1% over the same time period. The 2016 NCUA operating budget marked the ninth straight year the agency has increased its budget.
"As the U.S. banking industry continues to show improvement and the number of bank failures steadily declines, we remain focused on fulfilling the responsibilities of our mission while prudently managing costs," FDIC Chair Martin Gruenberg said.
“Chairman Gruenberg’s comments about the strength of the banking sector could just as easily apply to the credit union system,” said Ryan Donovan, CUNA’s chief advocacy officer. “The credit union system not only continues to show improvement but has shown its strength consistently throughout the crisis. In fact, the number of credit union failures during and since the crisis pales in comparison to the number of bank failures. The FDIC budget action once again leaves us asking: why does NCUA refuse to reduce its budget?”
“That’s the question we hope to get the answer to through increased transparency of the NCUA budget process. That is why we’ve asked NCUA to hold a hearing on its budget and why we have pushed for enhanced congressional oversight of the agency and its budget,” Donovan added. “It makes very little sense for NCUA’s budget to continue to increase year after year after year when FDIC is reducing its budget.”
CUNA President/CEO Jim Nussle wrote to the NCUA before it unveiled its budget, sharing credit union concerns about the ever-increasing agency budget, particularly because the agency is primarily funded by the credit unions it regulates.
“We do not believe the agency needs to increase its budget to fulfill its mission. The financial crisis is over. The credit union system is healthy and strong,” Nussle wrote. “NCUA should be proposing budget reductions to decrease credit unions’ financial obligation to the agency.”
After the agency unveiled its budget, Nussle called for the NCUA to “monitor and modernize resources to maximize funds and contain costs.”
CUNA has also worked on legislative solutions for the NCUA’s budget, championing the NCUA Budget Transparency Act (H.R. 2287), which would require the agency to open the budget up to comment and public hearing before it is approved.
H.R. 2287 passed the House Financial Services Committee last week with a 40-16 vote.