WASHINGTON–Following NCUA's 2018-19 proposed budget and budget hearing, CUNA and NAFCU have outlined areas of the budget the agency can still address.
Saying CUNA believes “the efficiency of NCUA’s operation are paramount to responsibly shepherding credit union members’ resources,” CUNA CEO Jim Nussle said in a letter to the agency the trade group believes “there is immense capacity for NCUA to reduce its footprint, right-size the organization, and emerge from the resulting transition as a nimbler, stronger, and more efficient and effective regulatory body.”
While writing that CUNA believes the NCUA budget proposal reflects that the agency “has embraced a truly transformative strategic plan with the promise of further efficiencies and more obvious fiscal discipline in the years ahead,” Nussle also called on NCUA to:
- Reign in budget increases and right-sizing overall outlays
- Reduce staffing levels and control compensation costs
- Reconfigure its regional offices
- Improve exam efficiency and innovation
- Address distribution of cost burdens/Overhead Transfer Rate
- Address its Asset Management and Assistance Center (AMAC).
- Extend the budget process somewhat. Giving interested stakeholders a bit more time to evaluate, analyze, and socialize the proposals will help us continue to formulate thoughtful responses
NAFCU Asks For Commitment To Efficiency
NAFCU acknowledged the agency's efforts in slowing the rate of its year-over-year budget growth and encouraged a continued commitment to efficiency.
"NAFCU appreciates that the board has taken steps to substantially slow the rate of the agency's year-over-year budget growth," said NAFCU Director of Regulatory Affairs Alexander Monterrubio, who signed the trade association's letter. "With those positive steps in mind, NAFCU and our members remain hopeful that the agency will continue its commitment to efficiency long into the future. Such actions would be a well-received capstone to the board's multi-year initiative to reform the agency's operating budget and structure."
NCUA has proposed $298.2 million in spending for 2018 – a 2.1% increase from the restated 2017 budget – and $302.8 million for 2019.
Commenting on proposed budget items and future initiatives, NAFCU asked that the board address several questions when it votes on its proposed budgets, in particular asking how the agency can reduce its staff in a manner that reflects a consolidating industry.
In the letter, NAFCU also encouraged NCUA to create a credit union advisory council as an effective way to increase stakeholder input. It also urged that the NCUA return the normal operating level of the National Credit Union Share Insurance Fund to 1.3% and asked that the proposed revisions to the overhead transfer rate (OTR) not be finalized, instead recommending the NCUA build upon the current OTR methodology.