Today, CUNA Chief Economist Mike Schenk presented before the NCUA Board regarding the agency’s 2021-2022 draft budget.

We appreciate the NCUA’s effort in publishing a detailed draft budget that rationalizes agency expenditures. We, once again, find the NCUA’s Budget Justification document to be clear, comprehensive, and well-developed. The proposed activities and expenditures described generally align with previously announced and vetted strategic initiatives. It also appropriately responds to changing supervisory priorities, especially in light of the COVID-19 crisis.

However, the Budget Justification document is a fairly high-level summary that—perhaps by design—omits detail necessary to adequately assess the need and rationalization for each of the individual new positions proposed. We know the duties to be performed—but little about the need for those duties to be performed. In that regard, CUNA believes that the efficiency of NCUA’s operation are paramount to responsibly using credit union members’ resources as NCUA seeks to become a world class regulator.

Furthermore, we have real concerns around any obvious expansion in consumer protection examination activity. Our members believe altering the agency’s risk-focused examination process and substantially increasing examination-related expenditures is simply not warranted. The agency provides no supplementary evidence to suggest credit unions’ consumer compliance management has become a risk area warranting an increased expenditure of agency resources. As its mission statement makes clear, the NCUA exists to ensure the safety and soundness of the credit union system, and its examination program should remain focused on that objective. In addition, the agency already has the tools in place to further evaluate a credit union’s consumer compliance program when a need is identified through the risk-focused examination process.

Read Schenk’s entire testimony here.

NCUA staff also presented during the briefing.

The agency is accepting public comments on the draft budget until December 11. The Board is scheduled to vote on the budget at the December 17 open Board meeting.