CUNA Senior Vice President and Deputy General Counsel Mary Dunn echoed that observation, saying the 2013 budget increase was out of line with banking agencies.

And further, said NAFCU Chief Economist David Carrier, when the rate of inflation is just 2%, a 7.5% pay increase is hard to justify, even following a two-year pay freeze.

Carrier also stressed that improving financials don't justify increased staffing costs. According to the NCUA's National Credit Union Share Insurance Fund financial reports, as of Dec. 31, 2012. there were 369 CAMEL 4 and 5 credit unions, a reduction from 2011's year-end figure of 409. The amount of insured shares those institutions represent has been more dramatically reduced. As of 2012 year end, CAMEL 4 and 5 institutions represented $16.0 billion worth of insured shares, or about 2.02% of total insured shares. That's down significantly from 2011's year-end figure of $26.3 billion.

And, there were 170 fewer credit unions coded CAMEL 3 as of December 2012 compared to the year prior, representing a $20.6 billion decrease in insured shared. “At a time when the number and assets of CAMEL 4 and 5 credit unions are declining so dramatically, it's hard to accept a 7% increase in NCUA's budget for staffing,” Carrier said. “We hope that the budget revision will reflect a more realistic assessment of actual costs.”

Dunn said second guessing additional costs for safety and soundness when credit union system performance has improved is a legitimate policy question.

The NCUA's proposed derivatives rule includes cost estimates that could run as high as $16 million during the first three years. That estimate includes between $3.8 and $6.5 million to hire contract employees to create the program, process applications and assist with supervision, and an additional $1.8 million to $3.6 million to hire six to 12 new full-time equivalent in-house supervisory employees. The additional staffing costs would come in 2014, according to the proposed rule.

Dunn said CUNA will strongly oppose the agency's estimated costs and proposed fee structure that would require credit unions to pay for the increased authority in its comment letter. She said the trade, which is working on its own cost estimate for derivatives supervision, would be more willing to support more realistic costs that aren't based upon a worst case scenario. “The NCUA hasn't provided enough information so credit unions can be sure that's what it costs,” she said. “I think even NCUA has said they're not even sure this will be cost at the end of the day, so let's not set up a fee structure based upon estimates.”

She said based upon CUNA's own estimates, the NCUA could potentially manage the program within the bounds of current budget provisions. She stressed that CUNA appreciates that the NCUA “did the right thing by going forward with the derivatives proposal.”