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CUNA filed written comments with NCUA Tuesday on the agency’s proposed 2024-25 budget, noting significant concerns with the proposed overall increase and with increases in examination staff and examination time dedicated to consumer compliance issues. CUNA also thanked NCUA for providing clear, comprehensive budget information and rationalization, the only federal financial regulatory agency to embrace this level of transparency and engagement.
NCUA’s proposed 2024 budget reflects a 9.5% percent increase in expenditures overall compared to the 2023 board-approved budget. The Operating Budget (which accounts for 97% of total agency expenditures) reflects an increase of 11%.
“The increases are proposed against a backdrop of elevated financial pressure at the nation’s credit unions—with operating expenses and funding costs rising rapidly and a variety of income sources under increasing pressure,” the letter reads. “CUNA estimates that net income will decline by roughly 20 basis points in 2023 and by an additional 20 basis points in 2024. Many economists believe the Federal Reserve’s aggressive policy moves will likely put the nation into recession—which would only serve to magnify these current financial challenges.
“Even if the so-called ‘soft landing’ can be delivered, the Federal Reserve has acknowledged the likelihood that well over one million consumers may be joining the rolls of the unemployed in the coming months,” it adds. “These trends suggest the agency should be laser-focused on budgetary discipline, just as credit unions are in an environment where costs are increasing across the board.”
CUNA also notes surprise at the level of proposed increase in examiners and examination time dedicated to consumer financial protection and fair lending laws.
“We disagree with such a significant investment of resources dedicated solely to examination of credit unions regarding consumer financial protection issues. NCUA examiners are keenly focused on any hint of anti-consumerism and they take their jobs very seriously,” the letter reads. “Credit union members need no significant additional investment of NCUA resources to protect them from the institutions they own. Rules, regulations, and examinations should be tailored so they are not overly burdensome on credit unions.”
The written comments follow CUNA’s presentation at NCUA’s budget meeting last week. The board is scheduled to vote on the final budget at its Dec. 14 meeting.