Removing Barriers Blog

NCUA Board Approves 2019 - 2020 Budgets
Posted November 15, 2018 by CUNA Advocacy

At today’s meeting, the NCUA Board was briefed on the status of the Share Insurance Fund, approved the 2019 - 2020 budgets, and issued a proposed rule on fidelity bonds.

1. Share Insurance Fund Quarterly Report

    The Board received a quarterly report on the Share Insurance Fund indicating total income of $76.5 million and net loss of $93.5 million for the quarter ending September 30, 2018. The balance sheet showed total liabilities and net position of $15.8 billion. The number of CAMEL Code 4/5 credit unions decreased slightly to 203; CAMEL Code 3 credit unions also decreased to 1,001. The number of credit union failures in 2018 sits at 6. The Fund’s equity ratio is currently 1.35%.

    2. 2019 - 2020 Agency Budgets

    The Board approved its 2019 ($334.8 million) and 2020 ($343.9 million) budgets. Specifically, the Board approved the following:

         -The 2019 Operating Fund Budget of $304.4 million and 1,173 FTEs, the 2020 Operating Budget of $316.2 million and 1,173 FTEs, reorganization expenses to be paid from past budgets’ unused balances of $9.5 million, and an extension through 2020 of the Executive Director’s authority to reallocate reorganization funds.

         -The 2019 Capital Budget of $22 million and the 2020 Capital Budget of $18.6 million.

         -The 2019 Share Insurance Fund Administrative Budget of $8.4 million and five FTEs and the 2020 Share Insurance Fund Administrative Budget of $9.1 million and five FTEs.

    NCUA noted that later this month—which is earlier than usual—it will be issuing its annual letter to credit unions regarding the budget and posting its operating fee online calculator to its website. The 2019 operating fees will be due in April.  

    3. Fidelity Bond Proposed Rule

    Lastly, the Board issued a proposed rule to amend the fidelity bond requirements under Part 704 for corporate credit unions and under Part 713 for natural person credit unions. The proposed rule intends to:

         -Strengthen a board of directors’ oversight of a credit union’s fidelity bond coverage;

         -Ensure there is an adequate period to discover and file covered claims following a credit union’s liquidation;

         -Formalize a 2017 OGC legal opinion that permits a natural person credit union’s fidelity bond to include coverage for certain CUSOs; and

         -Clarify the documents subject to the NCUA Board’s approval and require all bond forms receive the NCUA Board’s approval every ten years.

    NCUA will accept comments on the proposal for 60 days following publication in the Federal Register. CUNA will issue a Comment Call on the proposal shortly.