NCUA Board Chairman Debbie Matz said at Friday's Open Forum the agency will likely eliminate some full time staff positions in the 2016 operating budget.
However, Matz also said she expected the agency's overall operating budget to increase even if the agency cuts positions, because it will have to make capital expenditures to update systems.
She said the agency began to update its systems five years ago, but then the downturn hit and the work had been postponed. She pointed specifically to the agency's Automated Integrated Regulatory Examination System as one that needed updating.
Matz also announced the NCUA will return to a two-year budget in 2016. The agency is expected to present its operating budget for next year during its monthly board meeting Nov. 19.
"This will really be a return to business as usual for us," Matz said. "We had a two-year budget cycle for many years."
Agency officials had previously said the NCUA might take that step, but had not publicly committed to it.
NAFCU President/CEO Dan Berger took a dim view of the change, particularly in light of the agency's resistance to holding budget hearings.
"Going to a two-year budget is unreasonable, especially without a budget hearing," Berger told CU Times.
The unusual session featured all three of the NCUA's board members, along with five senior agency staff seated at a long table taking questions from meeting attendees.
CUNA's Senior Director of Advocacy Andrew Price asked whether the agency would start using an 18-month exam cycle. Matz replied the agency might, but not now.
"We need to give reg relief time to see … that it doesn't affect the safety and soundness of the system," Matz said. "We're not saying no, I just don't think this is the right time to do it at the same time we're doing this extensive reg relief."
NCUA Director of the Office of Examination and Insurance Larry Fazio explained the agency streamlined the exam process to enable credit unions and examiners to complete exam work before examiners arrived at the credit union. That will minimize operational disruption an exam causes for a credit union, he added.
Fazio said the agency would use the occasion of the AIRES update to build in a secure portal so examiners and credit unions could exchange information to achieve that goal. He also said the agency planned to adopt more sophisticated digital analytical tools would enable it to examine loan and investment portfolios more efficiently.
NCUA Public Affairs Specialist John Fairbanks emphasized the FTE cuts will be done through attrition, and that layoffs are not being planned at this time.
"In the draft 2016-2017 proposed budget, the NCUA Board will be considering a strategic reduction of some field program FTEs," Fairbanks said. "If approved, the reduction will occur through attrition, that is, naturally over time, in an orderly and deliberate fashion."
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