NCUA discloses 13% 2010 budget increase

ALEXANDRIA, Va. (11/20/09)--The total 2010 budget for the National Credit Union Administration (NCUA) will be $200,923,512, an increase of 13% over the 2009 budget, the board reported during its monthly meeting held Thursday.

Click to view larger image Former NCUA Chairman Michael Fryzel (left) and the agency's current leader, Debbie Matz (right), listen intently to a staff presentation of the 2010 operating budget plan, which represents a 13% jump from the previous year. Matz said her top goal as chairman is for the NCUA to be recognized as a "fair and effective regulator that sets the highest standards for safety and soundness." She added the 2010 budget will help the agency achieve this goal. (CUNA Photo)
NCUA Chairman Debbie Matz said the increased budget is a response to past budget cuts and also reflects the need for more funding due to the current "state of the credit union industry." Over $14 million of the $23 million funding increase is related to NCUA program changes.

Responding to the news of the budget increase, Credit Union National Association President/CEO Dan Mica said that CUNA has "significant concerns about the magnitude" of the increase, adding that those concerns are shared by many credit unions and credit union leagues.

Even with steps the NCUA has taken to mitigate the cost impact, the budget actions taken today will add to the cost burden born by credit unions, Mica added. "Going forward, we hope to see more disclosure in the budget process and will seek to work with NCUA to ensure expenses are kept to the minimum necessary without compromising the agency's mission of safety and soundness," he said.

Matz said that while "the proposed increases in dollars and full time staff are extraordinary," credit unions, regulators, and citizens "are living in extraordinary times."

The budget adds a total of 74 new positions to NCUA staff, bringing the total NCUA staff to 1,112.

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$1.5 million of the budgetary increase will go toward establishing the NCUA's new Office of Consumer Protection, which will divide a total of thirty positions into two divisions, one addressing consumer protection and one addressing consumer access. While many of the Office of Consumer Protection staffers will be current NCUA employees, the new agency will create seven new positions.

According to the NCUA's board action memorandum on the budget, the Office of Consumer Protection will:

  • Provide consumers with educational resources and a forum for dispute resolution;
  • Consolidate a number of consumer protection functions;
  • Work with other federal agencies to address consumer protection;
  • Take on centralized chartering activities; and
  • Take over the tasks of the NCUA's ombudsman.
The Office of Consumer Protection will also handle field of membership change processing, a move that could address concerns over consistent handling of FOM requests.

The establishment of the Office of Consumer Protection will "elevate the importance of consumer protection in the industry," board member Gigi Hyland said.

The NCUA budget will also create a new Office of Chief Economist, and will dissolve the NCUA's National Examination Team, which was charged with examining cases that threatened the National Credit Union Share Insurance Fund. The examination team, which was established last year, handled large and complex credit unions that were experiencing financial issues, but the NCUA determined that the centralized oversight of the examination team did not allow for adequate monitoring of troubled credit unions.

A further 57 of the new positions will be taken up by regional employees added due to the NCUA's new Annual Examination Program. The NCUA will realign some of its examiner resources and will also hire 39 examiners, 12 case officers, four lending specialists, and two supervisory examiners to implement increased onsite and offsite monitoring of troubled credit unions.

The agency plans to add a further 28 examiners in 2011. The examinations will be integrated into the existing examination schedule, and will not result in new examinations for credit unions.

The NCUA also approved a 2010 overhead transfer rate of 57.2%, up from the 53.8% rate approved for 2009, during the meeting. Additionally, the agency voted to decrease the natural person federal credit union operating fee rates by 1.58 percent and increase the asset level dividing points for natural person federal credit union operating fee scale by 8.5%.

These operating fees will be collected by the NCUA by April 15, 2010.

The board has also shifted supervison of California credit unions to Region II because of the availability of more experienced examiners. It also moved supervision of Alaskan credit unions to Region V.

For further quotes from Matz, use the resource link.

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Resource Links
Matz statement
NCUA OPerating Budget 2010
NCUA OTR 2010
NCUA Operating Fee Structure 2010


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