ALEXANDRIA, Va.–In a 2-1 vote, the NCUA board has approved budgets for 2020 and 2021 that are slightly below the estimates made during its November budget briefing.
In an unusual departure from prior board meetings at which budgets were voted on and where discussion typically focused on the overhead transfer rate or whether an increase was merited at all, discussion among board members was dominated by disagreement over the need for enhanced consumer protection staff and examinations at the agency (see related story). Board Member Todd Harper cast the dissenting vote after raising objections to a lack of new funding for consumer compliance positions and oversight, while Board Member J. Mark McWatters expressed his own support for NCUA doing more to ensure consumer compliance, but said he was voting to approve the budget because not doing so would create a nightmare.
Chairman Rodney Hood said he saw no reason to add to oversight of consumer compliance at NCUA, saying CUs already look out their members’ best interests.
The board voted to approve a 2020 operating fund budget of $315.8 million and 1,180 full-time employees, and a 2021 operating budget of $327.9 million, and a similar number of employees. Both are slightly below the budget estimates the agency had proposed during its budget briefing in November.
The budget vote included approval of $2 million in unspent prior-year balances to be moved to the 2020 budget.
The overall 2020 budget marks a 3.8% budget increase over 2019. The agency’s CFO, Rendell Jones, said half of that 3.8% increase reflects an additional $2 million that is required to be paid into the federal employee retirement system.
The 2020 budget will include a slight change in the overhead transfer rate (but no change to the underlying methodologies for computing the OTR), and an operating fee for federal credit unions of 1.13%, an eight basis point reduction from the draft budget.
NCUA said it is projecting overall asset growth among federally insured credit unions of 5.6% during 2019.
As CUToday.info reported previously, NAFCU has noted the approved 2020 operating budget represents an approximately 57% increase in NCUA's budget over the past decade, while the industry has seen a 32% reduction over the same period.
NASCUS' Perspective
“NASCUS appreciates additional detail provided in NCUA’s budget justification on what factors contributed to the increase of the overhead transfer rate (OTR) from 60.5% in 2019 to 61.3% in 2020," said President Lucy Ito. "Going forward, NASCUS looks forward to working with NCUA to more accurately project the likely costs associated with state supervisory agencies.”