ALEXANDRIA, Va. (11/18/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said the National Credit Union Administration's 2012 budget, which, at $236.9 million, represents a 5.1% increase over 2011's total, "is considerably lower than what we had feared it would be," but the CEO added that CUNA "will still push the agency to contain all costs going forward."
NCUA Chairman Debbie Matz during Thursday's open board meeting noted the 5.1% increase is less than half of the 12% to 13% budget growth rates that the agency has seen over the past three years. Matz said the NCUA budget is a valuable investment in the safety and soundness of credit unions, adding that "budget investments that credit unions have made in NCUA these past few years are paying off."
The NCUA board approved a series of agenda items, including the 2012 agency budget with a 5.1% increase over the prior year, in a quick Thursday open meeting. (CUNA photo)
The 2012 budget adds 33 new positions, including 15 specialists in the areas of lending, capital markets, information systems, supervision and troubled institutions, eight examiners and three supervisory examiners, to the NCUA payroll. Just over $7 million of the $11.5 million budget increase is tied to the extension of health, dental and vision benefits to all NCUA employees. However, the NCUA said this increase is more than offset by the $7.9 million savings resulting from applying a pay freeze to all staff for 2012.
The budget also contains a $2.6 million increase in travel expenses and a combined $1.1 million in contracted services and rent, communications and utilities payments.
CUNA is reviewing the new budget in detail and will be following up to get more answers for credit unions on specific numbers and assumptions.
The agency also announced that its 2012 overhead transfer rate (OTR) would increase to 59.3%, and said 2012's operating fee rate for federal credit unions would decline by .90%. CUNA will review the OTR change.
The 2012 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment will likely be between 8 and 11 basis points (bp), the NCUA said, and the agency added that will not charge a National Credit Union Share Insurance Fund (NCUSIF) premium in 2011. Matz added that the NCUA would prefer not to charge an NCUSIF premium in 2012, but added that an assessment, if charged, would be between 0 and 6 bp.
CUNA has many concerns about the increases in the agency's budget, in light of the fact that costs in other federal regulatory agencies are being contained. Credit unions deserve to have more information about the need for these increases, Cheney said.
The agency also reported on the status of the NCUSIF and TCCUSF during the meeting, noting that the NCUSIF's equity ratio was 1.32% as of October 31. The NCUSIF holds $872 million in reserves. There are currently 394 CAMEL 4 and 5 credit unions, which represent 3.89% of insured shares, or approximately $30 billion in assets. NCUA staff also noted that there are 1,761 CAMEL 3 credit unions, which represent 15.87% of insured shares, or $124 billion in assets. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent approximately 20% of total insured shares, the NCUA said.
For more on Thursday's NCUA Board Meeting, use the resource link.