The 2011 Federal Deposit Insurance Corp. (FDIC) operating budget is slightly lower than its 2010 budget despite a 2.5% increase in staffing, the agency reports.
In comparison, the National Credit Union Administration’s (NCUA) 2011 budget will increase 12%—$25 million—over 2010. The agency’s total budget for 2011 will be more than $225 million, and includes some pay raises exceeding 6%.
“I am happy that we are able to see a slight drop in next year’s budget while devoting new resources to implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act,” said FDIC Chairman Sheila Bair. “Staff met the challenge to find savings to offset a portion of the additional resources needed to carry out our new responsibilities under the Dodd-Frank Act.”
In a letter (pdf) to NCUA Chairman Debbie Matz, Credit Union National Association President/CEO Bill Cheney urged the agency to mirror credit unions’ belt-tightening measures and President Obama’s goal to freeze the salaries of federal civilian employees for two years.
“Although credit unions generally are well-capitalized, the past three years have been very trying,” he wrote. “With elevated loan losses and expenses related to share insurance and corporate credit unions, credit unions earned very little net income in 2008 and 2009.
“This year,” he continued, “net income has recovered somewhat, but is still far below ‘normal,’ especially considering the need for many credit unions to rebuild capital. Faced with these circumstances, credit unions have had to undertake significant measures to economize, including limiting salary increases and, in some cases, going so far as to cut pay, reduce staff, and close branches.
“In light of the belt tightening at credit unions and the new proposal from the Administration, we believe it is appropriate and reasonable for NCUA to do all it can to contain its own costs,” Cheney noted.
The FDIC board also voted on a final rule to raise its equity-to-insured deposits ratio to 2%.