ALEXANDRIA, Va.—NCUA cutting its proposed 2017 operating budget by nearly $1 million was welcomed by the CU trades. However, CUNA and NAFCU want the agency to make further reductions.
At Thursday’s NCUA board meeting the agency approved a 2017 operating budget nearly $1 million below the projected $299.2 million, and a 2018 budget of $312.1 million.
"We appreciate the agency's efforts to be more transparent and allow credit unions to comment on the budget process in a constructive manner,” said CUNA President/CEO Jim Nussle. “This is an incredibly important development that shows the NCUA board is attentive and responsive to credit union concerns.”
But Nussle added that, at the same time, more credit unions continue to have a number of concerns with the rising costs of the agency's budget—which CUNA has outlined in numerous meetings, hearings and letters, he said.
“NCUA's budget continues to increase substantially in the face of post-crisis improvements in credit unions, and at a rate that significantly outpaces changes in credit union operating costs and the budgets of other banking regulators,” said Nussle. “NCUA staffing levels increased substantially in response to the greatest financial crisis in modern history; however, the agency's FTE count is virtually unchanged since the peak of the crisis even though credit union financial conditions have improved dramatically.”
Nussle noted that CUNA’s analysis of NCUA’s budget, which he said used the time period that NCUA requested and the specific banking agencies that NCUA deemed appropriate, found “that NCUA's spending substantially outpaced the increases at the banking agencies over the entire 2007 to 2015 period.”
“The agency provides woefully little information on the rubric it uses to determine appropriate staffing levels,” said Nussle. “Instead it rationalizes what appears to outsiders as unnecessarily high staffing by simply explaining that CU complexity has increased.
"CUNA's comments on the budget reflected input from our members and our examination and supervision subcommittee, and the CUNA/league system will continue to recommend common-sense cost-cutting measures and will work with the agency to help ensure this can be accomplished in a way that preserves system safety and soundness," said Nussle.
NAFCU President and CEO Dan Berger said that while the trade association and its members appreciate that NCUA Board Chairman Rick Metsger and Board Member Mark McWatters listened to their concerns during last month’s budget briefing, the budget approved Thursday does not reflect a “material change” in spending efficiency.
“Every dollar credit unions send to support NCUA’s budget is a dollar not being used serving their members,” said Berger. “However, we welcome the $1-million decrease from budget projections as a first step, and we hope it signals a trend toward further budget discipline in years to come.”