WASHINGTON—The credit union trade groups will call on NCUA to rein in its spending when the agency hosts its budget hearing later this week.
On Thursday, at 2 p.m. ET, the board will hold a two-hour public budget briefing. Earlier this month NCUA released its 2017–2018 budget proposal that reflects a more than $8-million increase from the 2016 board approved budget.
NAFCU and CUNA have both expressed praise for NCUA’s move to improve budget transparency, but both also want to see budget reductions.
“We want to express our appreciation to Chairman (Rick) Metsger and Board Member (Mark) McWatters in their improvements to the budget process regarding transparency and allowing stakeholders to comment on the budget,” said CUNA Chief Advocacy Officer Ryan Donovan, before turning over comments to VP Mike Schenk during a press call Monday.
Schenk said that the trade association intends to tell NCUA that it has done a “terrific job” regarding the budget process, and that it has listened to CUNA recommendations and acted on them.
“We think, however, there are several small improvements that than still can be made, and our key message will be that credit unions deserve a smaller and better regulator.”
Schenk noted that annually CUNA conducts an examination survey among its members and that in the recent survey CUs stated that their biggest problem is that exam requirements are placing increasing pressure on credit union resources, making it harder to serve members.
“The survey finds an astounding 21% of credit union CEOs are dissatisfied with their exam. So, clearly, the NCUA has work to do on that front,” said Schenk.
Pointing out that the financial crisis is now in the rear view mirror and that troubled credit union assets have now declined by about 80% from a high of $43 billion in 2010, Schenk emphasized that NCUA’s budget continues to rise.
“From 2010 NCUA’s budget reflects a 45% increase,” said Schenk. “And in that same period inflation has increased by 9.3%. The NCUA budget has increased more than four times faster than inflation since the financial crisis ended.”
CUNA, too, said Schenk, will tell NCUA that its spending is not in line with that of the FDIC.
“While NCUA spending has increased every year since the crisis ended, FDIC spending has declined each year since 2011,” said Schenk. “NCUA’s 45% budget increase since 2010 is a stark contrast to the FDIC’s 29% budget decline since 2011.”
NAFCU, stated that it too appreciates the additional transparency the budget hearing brings and is asking for greater efficiency from the agency.
“NAFCU has long-sought greater transparency on the budget process from the NCUA,” said President and CEO Dan Berger. “We welcome the opportunity to review the budget in detail, and provide our insightful feedback, as well as our members’, during the Oct. 27 briefing. NAFCU has repeatedly urged the agency to sharpen their pencils and implement spending efficiencies and reduce line items, where possible.”