ALEXANDRIA, Va.—While crediting NCUA for listening to CUs in crafting its proposal on field of membership, NAFCU and CUNA shared concerns over the agency’s new operating budget.
The CU trade associations responded to several matters addressed at Thursday’s lengthy NCUA open board meeting.
Addressing the FOM proposal, both NAFCU and CUNA credited the agency for comprehensive changes to the existing rule.
“NAFCU applauds the NCUA board for proposing the most comprehensive field of membership reform initiative that the industry has seen in over a decade,” said NAFCU President and CEO Dan Berger. “As commerce and consumer behavior continue to rapidly evolve with innovative technologies, we are pleased to see that the agency listened to our member credit unions’ suggestions on how to keep pace with today’s marketplace. NAFCU is carefully reviewing the proposal and we look forward to working with NCUA to ensure that this rule provides requisite regulatory relief for federal credit unions.”
CUNA President and CEO Jim Nussle also applauded NCUA for developing a proposal that will provide greater choice and flexibility for credit unions to better serve consumers.
“Today’s rule incorporates many of the recommended changes suggested by CUNA and our members that will better align federally chartered credit unions with state chartered credit unions who have seen sensible changes by their legislatures in recent years as a result of the demands from the communities they represent,” said Nussle. “We thank the NCUA for listening to CUNA and drafting a rule that stays within the confines of the Federal Credit Union Act all while ensuring American consumers are allowed more options when choosing their financial service provider.”
Not Happy With Operating Budget
The trades were less kind about NCUA’s new operating budget. By a 2-1 vote the NCUA board Thursday approved an operating budget for 2016 and 2017 that comes with a 4.1% increase over its predecessor, bringing NCUA’s 2016 budget to $290.2 million.
“While NAFCU and our members appreciate the NCUA board’s continued commitment to increasing budget transparency, we firmly believe that more can be done to ensure that credit union dollars are being spent efficiently and effectively,” stated Berger. “The agency has not held a public hearing on its budget in six years, and credit unions deserve the chance to be a part of the process that they ultimately fund.”
"CUNA remains very concerned that the NCUA has increased its budget for the ninth straight year rather than propose budget reductions to decrease credit unions' financial obligation to the agency,” said Nussle. “We believe the agency needs to monitor and modernize resources to maximize funds and contain costs. The credit union industry is healthy and strong, and CUNA will continue pressing the agency to be more efficient with credit unions' funds."
Regarding the exam cycle, which NCUA Chairman Debbie Matz suggested Thursday might someday move to 18 months for well-run CUs, NAFCU believes credit unions are ready for that change today.
“NAFCU firmly believes the health of today's credit union industry necessitates NCUA’s moving back to an 18-month exam cycle for well-run credit unions in 2016,” said Berger. “While we appreciate Chairman Matz's positive comments about returning to this longer cycle in the future, we fundamentally believe the industry is ready for it and needs it today.”
“We were very pleased to hear Chairman Matz say what we have been urging in meetings and our comment letter: that the agency should use efficiencies and analytics to reduce the examination frequency for well managed credit unions,” said Nussle. “We look forward to the agency implementing this, and thank the Chairman for her leadership on this matter.”