ARLINGTON, Va.—NAFCU and CUNA have each written to NCUA sharing concerns over the agency’s proposed 2023-2024 budget.
As CUToday.info reported, NCUA has announced a proposed combined 2023 proposed budget of $367.0 million, an 8.1% increase from the 2022.
In NAFCU’s letter, Chief Economist and Vice President of Research Curt Long reiterated many of the recommendations and concerns he outlined before the NCUA board during its public budget briefing.
In the letter, Long urged the agency to focus on implementing lessons learned from the pandemic and to notice the achievements that have already been made towards cost-savings. He also made a number of recommendation, calling on the agency to:
- Preserve the strength of the National Credit Union Share Insurance Fund without overburdening credit unions with exorbitant operating fees and return excess cash from the Operating Fund to credit unions
- Continue to pursue exam modernization efforts, including a hybrid, virtual, and in-person exam posture
- Reduce costs associated with the Model Examination and Risk Identification Tool and provide realistic estimates for completion and maintenance
- Achieve greater transparency regarding cybersecurity expenses
- Continue to support financial inclusion initiatives and engage in open communication and timely resolution of issues through the newly established Office of the Ombudsman
CUNA’s Letter
Separately, in its letter, CUNA wrote, “The NCUA’s proposed 2023 budget reflects an 8.1% increase in expenditures overall compared to the 2022 Board-approved budget. Although the requested Capital Budget and Share Insurance Fund Administrative Budget reflect declines, the Operating Budget (which accounts for 94% of total agency expenditures) reflects an increase of 9.6%.
“While an increase is unsurprising in today’s economic environment, CUNA is concerned with the extent of this proposed increase,” the letter continued, stating increases come against “a backdrop of elevated financial pressure” for credit unions.
Specific Points
CUNA also said it:
- Supports the addition of certain positions, including a new one for the Office of Minority and Women Inclusion and special examiners at the regional office level, but questions the need for a net increase of 10 specialist examiners
- Urges NCUA to continue to seek to contain travel costs by use of offsite examination procedures and virtual options for training
- Continues to have significant concern around any expansion in consumer protection examination activity, as CUNA members believe altering the agency’s risk-focused examination process and substantially increasing consumer examination-related expenditures is not warranted
- Urges NCUA to extend the credit union asset threshold for the 18-month examination cycle from $1 billion to $3 billion
- Strongly objects to any suggestion that the NCUA may need to charge a premium in the near future and/or that statutory changes to the share insurance fund funding guidelines are needed
- Suggests the agency give credit unions a “more obvious” role in the process of improving examinations, specifically, to develop and conduct ongoing, confidential examination staff satisfaction surveys distributed to credit unions after each examination
- Urges NCUA to collaborate thoroughly with the industry before any concrete steps are taken on climate-related financial risk
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