The NCUA's overall personnel costs need to be reviewed and budget increases should not be automatic each year, CUNA told CU Times on Wednesday.
The agency is expected to present its 2015 budget for approval at the monthly board meeting Nov. 20.
"It's almost like the budget increases are automatic and we're just asking the board members to stop and pause – is there a need to increase the budget ever year?" Mary Dunn, senior vice president and deputy general counsel at CUNA said.
"We're not saying that NCUA employees that perform well and actually provide good value to the agency don't deserve consideration for merit increases but we do think this whole area of employee costs in something that needs to be reviewed. Every organization needs to review it and I think credit unions don't have the awareness of what NCUA may be doing to hold costs down in that area," she added.
Dunn said CUNA is aware that the agency's union contract makes lowering personnel costs more complicated.
"But nonetheless, we do think there are ways to minimize those costs while at the same time not penalizing good employees. We think that is something NCUA should be looking at," Dunn said. "Travel costs is definitely an area that could be curtailed too."
Carrie Hunt, NAFCU senior vice president of government affairs and general counsel, said NAFCU would not support any budget increase unless there is a demonstrated need.
"We're looking for a conservative, responsible budget," Hunt said. "It has increased in recent years yet the number of institutions are decreasing."
Hunt called for more transparency in the budget process, such as a breakdown of line items and more discussion of budget figures.
"It seems as if the NCUA releases a budget every year and at mid-year they mysteriously find some quote unquote savings. I think there needs to be more transparency at the onset as far as where those dollars are going," she said.
In August, NCUA Board Member Rick Metsger said there were requests from various departments at the agency for positions that the board rejected as part of the mid-year budget. Metsger said the board would likely consider adding those positions in November as part of the 2015 budget.
The 2014 operating budget totaled $266.9 million after adjustments were made at the mid-year point. The 2013 operating budget was $251 million.
Hunt said the NCUA would have to analyze whether of not additional dollars are needed to create those positions or if they can be paid for with cost savings.
"We would have to carefully look at the NCUA's reasoning for adding those positions but in general, we support NCUA using and shifting existing resources and seeing if they can make any changes there," Hunt said.
Dunn said CUNA does not want to micromanage the agency's budget.
"We feel it is appropriate to raise issues and concerns and press for good management and stewardship. We're not going to set a specific numeric figure on what the FTEs are but anytime there's an increase in the agency employees, particularly when credit unions are telling us they feel there's an abundance of examiners to conduct routine examinations, you have to raise red flags about those increases," Dunn said.
She told CU Times that 12 examiners showed up at a well-capitalized credit union with less than $100 million in assets for a week.
"When that happens, the credit union is still trying to serve members but they're also trying to do what they need to do to work with the examiners too," Dunn said. "Having them on site has an effect on the credit union's operation so it's those kinds of things we think the agency ought to be more systematic in reviewing."
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