NCUA’s proposed 2021 budget appropriately responds to changing priorities, especially in light of the pandemic, CUNA Chief Economist Mike Schenk told the agency Wednesday. Schenk presented at NCUA’s public briefing on its 2021 budget, which the board will vote on at its Dec. 17 meeting.

“We, once again, find the NCUA’s Budget Justification document to be clear, comprehensive, and well-developed,” Schenk said. “The proposed activities and expenditures described generally align with previously announced and vetted strategic initiatives including the Virtual Examination Project and Enterprise Solution Modernization. It also appropriately responds to changing supervisory priorities especially in light of the COVID-19 Crisis.”

The proposed budget reflects a 1.4% decrease in expenditures overall, due in large part to restricted travel in 2020 and expected similar restrictions in 2021.

“CUNA believes that the efficiency of NCUA’s operation are paramount to responsibly using credit union members’ resources as NCUA seeks to become a world class regulator,” Schenk said. “As we’ve said in the past, we believe there is immense capacity for NCUA to reduce its footprint, right-size the organization and come out of the resulting transition as a nimbler, stronger, more efficient and more effective regulator.

“Furthermore, we have real concerns around any obvious expansion in consumer protection examination activity. Our members believe altering the agency’s risk-focused examination process and substantially increasing examination-related expenditures is simply not warranted,” he added.

Schenk’s testimony also calls on NCUA to commit to reduce the Normal Operating Level closer to its historic 1.3% norm. He also urged the agency to use the pandemic, and resulting credit union response, as a reference point for meaningful field of membership (FOM) reform.

“The COVID-19 Crisis has laid bare key FOM challenges and deficiencies and has produced a heightened awareness of safety and soundness concerns that concentrates risk in specific industries,” he said.