CUNA Chief Economist Mike Schenk recognized NCUA’s continuing improvements in its budget process Wednesday while presenting at NCUA’s budget briefing. Due to CUNA’s strong advocacy in support of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155), NCUA is now required by law to conduct budget briefings and accept public comments.
“CUNA recognizes and applauds NCUA’s improved budget process as well as most of the details of the current budget proposal. Together, they represent a clear, positive, and significant step in the right direction as the agency works to become a leader and innovator in the financial services industry,” Schenk said. “We again hope to see more innovation and modernization, more material reductions in the budget, and a continued focus on slowing the growth rate of expenditures.
The NCUA’s proposed 2019 operating budget is $304.4 million, a $1.7 million (0.6%) increase from the 2018 board-approved budget.
Schenk noted the proposed budget increase compares favorably to both increases in headline inflation (a 2.3% increase in the consumer price index in the year ending September 2018) and to increases in credit union operating expenses, a median increase of 4.7% during the year ending June 2018.
He also applauded the agency’s more than 20% decline in facilities costs compared to last year.
“CUNA argued for and fully supported both the Agency’s reduction in the size of the Asset Management and Assistance Center and the associated realignment of supporting functions to their central office counterparts,” Schenk said. “However, we again urge NCUA to provide more AMAC budget detail given the keen interest in this function often expressed by CUNA membership.”
Schenk also added that CUNA applauds NCUA’s decision to make the $735 million equity distribution after merging the Temporary Corporate Credit Union Stabilization Fund with the share insurance fund. CUNA was the only national trade association to advocate for the merging of the funds and immediate disbursement of distributions.
“We support efforts to return additional monies to credit unions as soon as possible and we strongly believe the NCUA Board should, over the next several years, revert the normal operating level to its traditional 1.3% ratio,” Schenk said.
Other highlights from Schenk’s presentation include: