ALEXANDRIA, Va. (11/10/11)—The National Credit Union Administration's (NCUA) 2012 budget, which is scheduled to be unveiled at next week's November open board meeting, will likely include an increase "in the single digits," NCUA Chairman Debbie Matz said in a Wednesday webinar.
She added that she could not speculate on whether future budgets would increase or decrease, as the agency determines budgets on a year-by-year basis.
Matz stressed that the agency has "spent a great deal of time scrubbing the  budget to eliminate inefficiencies and redundancies." She argued that recent budgetary increases, which have totaled $48 million in 2010 and 2011, have ultimately avoided $1.5 billion in potential National Credit Union Share Insurance Fund (NCUSIF) losses.
These increases have also allowed the agency to return to 12-month examination cycles matz said, and added there are no plans to allow healthy credit unions to fall under an 18-month examination cycle. The condition of credit unions can change dramatically over a six-month period, Matz said, adding that some of the troubles seen by now-defunct credit unions may not have been as severe if the NCUA had been on a 12-month examination cycle.
NCUA staff confirmed that there will be no National Credit Union Share Insurance Fund (NCUSIF) assessment in 2011, and said that the agency's goal was for there to be no NCUSIF assessment in 2012 either. Agency staff did, however, say a possible 2012 NCUSIF assessment could be in the range of zero to seven basis points (bp).
Matz added that the worst of the corporate credit union situation "is behind us," and said the agency plans to keep Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments in the single digits for the rest of the time they are due.
The 2012 TCCUSF assessment would likely be between eight and 11 bp, but NCUA staff said they would need to reconsider this assessment next year before releasing the final amount to credit unions.
The remaining assessments are expected to total between $1.8 billion and $6.1 billion, the NCUA added. This estimate does include some funds that have been received through recent settlements, but does not include any funds that could be received through legal actions that have been taken against several Wall Street firms that sold mortgage-based securities to the corporates. The agency has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan, and said earlier this year that it expects to take an additional five to 10 actions.
Any recoveries from these legal actions would be used to reduce TCCUSF assessments, the NCUA said.
Matz added that the 2012 TCCUSF assessment would be determined at the July open board meeting, and would be mailed out to credit unions in August or September of next year.