NEW: CUNA recommends efficiencies prior to NCUA’s 2016-17 budget

November 12, 2015

WASHINGTON (11/12/15, UPDATED 4 p.m. ET)--CUNA is very concerned about the continuing increase in the National Credit Union Administration’s operating budget, CUNA President/CEO Jim Nussle said in a letter sent to the agency today. Addressed to NCUA Chair Debbie Matz, the letter outlines budget concerns in advance of the agency’s Nov. 19 meeting, where it will vote on a budget for 2016 and 2017.

“While credit unions and their members benefit from NCUA fulfilling its mission to promote the safety and soundness of credit unions and the National Credit Union Share Insurance Fund, they are very concerned that the NCUA budget continues to increase at a time when the credit union system is very healthy,” Nussle wrote. “We do not believe the agency needs to increase its budget to fulfill its mission…NCUA should be proposing budget regulations to decrease credit unions’ financial obligation to the agency.”

To enhance the agency’s efficiency and ensure credit unions have access to appropriate information about the agency’s budget and resource allocations, CUNA is urging the NCUA to:

  • Look for efficiencies to cover the costs of its new costly regulations, such as the finalized risk-based capital rule, the new credit union service organization regulations and the stress testing requirements for larger credit unions;
  • Keep agency staffing levels consistent with industry trends. From 2009 to 2015, as the number of credit unions declined by more than 18%, the NCUA’s budget has increased more than 57% and the number of agency employees has increased by more than 22%;
  • Commit to moving toward an 18-month examination cycle through the implementation of examination efficiency. The NCUA should also pursue ways to increase employee efficiency, particularly relating to field staff that spend a large portion of time traveling;
  • Coordinate examinations with state regulators, and to accept a fellow regulator’s examination unless there are reason to do otherwise;
  • Fully disclose third-party business relationships in contracted services, which are the third largest NCUA expenditure;
  • Increase overall budget transparency by providing more frequent, detailed and useful information to credit unions on the budget, assumptions supporting the budget and the connection between the budget and the agency’s strategic plan. The agency should also resume the practice of holding public hearings on the budget;
  • Provide more information and seek public comment regarding the Overhear Transfer Rate, which includes annual briefings and hearings subject to notice.