Today,
CUNA Chief Economist Mike Schenk presented before the NCUA Board regarding its
proposed 2020-2021 agency budget. During the briefing, NCUA Chief Financial
Officer Rendell Jones walked the Board through a budget presentation.
While
CUNA supports aspects of the proposed budget—particularly the transparency of
the process—we did raise concerns, as detailed in Mike’s testimony.
The
proposed
budget includes a 3.9% increase, which we feel seems reasonable in the
context of approximately 2% inflation and with the 6% increase in credit union
operating expenses which is the point of reference for most credit union CEOs.
Further, we understand how personnel costs have a dramatic effect on overall
agency expenditures and recognize that regulatory and contractual obligations
drive a substantial
portion of the changes in overall agency budgeted expenditures each year.
However,
we did raise concerns in several areas:
- Regional
consolidation – while we support the focus on cost savings and efficiency
in consolidating regions, it has resulted in some inconsistency in the
interpretation and application of rules and regulations.
- Examination
cycle – an extended exam cycle is a helpful tool but should be expanded to
more credit unions (i.e., the threshold should be increased to $3
billion).
- NCUSIF
Normal Operating Level – we support the agency’s action last year to
decrease the NOL to 1.38% but urge the Board to ultimately reduce it back
down to 1.30%.
- Expansion
of the Office of Consumer Protection – while Board Member Harper’s
proposal may be well-intentioned, we believe altering the agency’s
risk-focused examination process and substantially increasing
examination-related expenditures is not warranted at this time.
NCUA
is accepting written comments on
the proposed budget until December 2.
The
Board will vote on the proposed budget at its December Board meeting.