WASHINGTON—In advance of the NCUA board’s consideration of its 2016 operating budget later this week when it meets, NAFCU and CUNA have sent letters to the agency expressing their concerns.
Key issues both trade groups note are that the proposed budget is not a reduction over its predecessor, and that despite NCUA’s efforts to provide clarity around how the budget was built, greater transparency continues to be needed.
In a letter signed by NAFCU President and CEO Dan Berger the trade association urges the agency to consider and justify each expense of its operating budget in advance of Thursday’s open board meeting.
Berger said the budget information NCUA has posted has been “extremely helpful” in explaining how the agency allocates funds from federal credit unions’ annual operating fees, and he urges further transparency. Berger noted that NCUA’s board agenda for the Nov. 19 meeting indicates the consideration of a “budget for 2016 and 2017,” which Berger said NAFCU believes would work against further budget transparency and efficiency.
“NAFCU is deeply concerned that a biennial budget will be inefficient and ineffective because it will yield inaccurate projections that will ultimately have to be refined by the agency after the first year,” Berger wrote. “When NCUA utilized a biennial budgeting process from 2008-2011, the agency consistently revised and increased its second-year projected budget.”
For NAFCU’s complete letter, available in CUToday.info’s The Gov, click here.
In CUNA’s letter, President and CEO Jim Nussle reminded that credit unions and, by extension, their members, provide nearly all of the agency’s funding, giving CUs a “vested interest in the agency’s budget.”
“While credit unions and their members benefit from NCUA fulfilling its mission to promote the safety and soundness of credit unions and the National Credit Union Share Insurance Fund, they are very concerned that the NCUA budget continues to increase at a time when the credit union system is very healthy,” wrote Nussle. “We do not believe the agency needs to increase its budget to fulfill its mission. The financial crisis is over. The credit union system is healthy and strong. NCUA should be proposing budget reductions to decrease credit unions’ financial obligation to the agency.
“Unfortunately, we anticipate that the budget the NCUA Board will consider later this month will not represent an overall reduction in the agency’s expenses; therefore, we urge NCUA to manage costs to the agency as a result of new regulations using existing resources, reduce staff costs in alignment with the reduction in credit unions subject to NCUA supervision, commit to moving toward an 18-month examination cycle through examination efficiency, coordinate examinations with state regulators, provide credit unions with more information regarding agency contractors, increase overall budget transparency and accountability, and provide more information and seek public comment regarding the Overhead Transfer Rate,” concluded Nussle.
For CUNA’s complete letter, available in CUToday.info’s The Gov, click here.