ALEXANDRIA, Va.–NCUA is projecting it will finish 2022 approximately $18 million under its projected budget, due to salary savings from positions that remain vacant and the fact most examinations remain virtual.
The agency is also projecting a small surplus ($0.6 million) in the budget for the National Credit Union Share Insurance Fund administrative expenses.
The estimates for other budget categories are materially unchanged from the approved budget, NCUA stated.
“A surplus is both a reflection of sound and prudent financial management and an opportunity to ask whether we can use these financial resources to address important short-term and long-term needs, as well as whether we can prudently return part of this surplus to credit unions,” said NCUA Chairman Todd Harper. “When it comes to our budget, we will not splurge. As a steward of the credit union system, the NCUA board has a responsibility to wisely spend, save, invest, and refund these extra dollars. Credit union members are counting on us to exercise fiscal restraint...”
Saying the agency must continue its focus on safety and soundness, he further stated the NCUA board must ensure the credit union system and the National Credit Union Share Insurance Fund “can adapt to the evolving financial, economic, and market conditions brought on by various external events and pressures.”
“As such, the agency will continue to prioritize and fund efforts related to cybersecurity, consumer financial protection, equitable financial innovation, and support for small credit unions and minority depository institutions,” Harper said. “The existing 2022 budget and staffing levels support these priorities and make the necessary investments and commitments to realize our vision for the agency.”
Hauptman: ‘Actual Give & Take Needed’
After praising NCUA for its budget “transparency,” NCUA Vice Chairman Kyle Hauptman called for the budget hearing scheduled for later this year to be a “true dialogue between NCUA and those who pay us. The hearing should have an actual give and take, so to speak, between NCUA and credit unions to arrive at a common understanding. This type of hearing seems fair, and it’s another way NCUA can be a model of good government.”
Hauptman said it’s no surprise the agency is projecting an $18 million surplus given the reduced head counts and the fact most examinations remain virtual.
The Lessons Learned
Touching on a point he has consistently made, that the NCUA budget’s funds belong to credit unions, he asked how CUs themselves are going to benefit from the surplus.
“I am hopeful that once we get back to normal --or more accurately – our new normal, NCUA – just like the rest of the world - can continue to take advantage of the lessons we learned regarding virtual exams, as well as communications, meetings, and more,” Hauptman said. “The cost savings and efficiencies could have a significant impact on future budgets. We certainly deserve some positives from the forced experiment caused by the pandemic.”
Give Back To CUs
Board Member Rodney Hood stated he would like the agency find a way to return some of money to CUs.
“I do think it is great news as we look at today's mid-session budget that we are seeing a residual budget balance, better known as a surplus,” said Hood. “And as I said last year, as we look at this surplus, I want to say that staff is drafting the 2023 budget now. I would certainly like to see staff develop a budget that controls cost and gives funds back to credit unions in some form or fashion.”