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CUNA Recovery should bring lower NCUA spending
WASHINGTON (12/4/09)—In a letter addressing aspects of the National Credit Union Administration’s (NCUA) proposed 2010 budget, the Credit Union National Association (CUNA) acknowledged that some increase in the spending plan reflects current economic conditions, but urged assurances that the agency will reduce expenditures when the country returns to a more stable operating environment. CUNA President/CEO Dan Mica wrote that some budget increase is to be expected to support agency efforts to handle additional safety and soundness concerns wrought by troubled financial times. But once the crisis has passed, Mica urged, the agency must consider it a priority to determine how to reduce spending. CUNA also noted credit unions concerns regarding the size of the increase for agency staff compensation next year—a 6.6% net growth in merit pay and locality adjustment. The agency needs to be sensitive, Mica said, to the fact that credit unions across the nation are scaling back expenses, including employee benefits, and have been forced to reduce salaries, enforce unpaid furloughs, as well as execute reductions in the number of workers. Mica stated clearly that CUNA has no intention to try micromanage the NCUA’s financial resources, just as CUNA believes it would be inappropriate for the NCUA to micromanage individual credit unions’ budgets. However, Mica reminded that NCUA is in a unique stewardship position among agencies because it is credit unions, and not the federal government, that funds its general operations. The total 2010 budget proposed Nov. 19 by the NCUA is $200,923,512, an increase of 13% over the 2009 budget. At an open board meeting, NCUA Chairman Debbie Matz said the increased budget is a response both to past budget cuts as well as a current need for more funding due to the "state of the credit union industry." Over $14 million of the $23 million funding increase is related to NCUA program changes.
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