Although people questioned increases, officials from the trade groups said it is evident that the agency is trying to become more efficient.

"It is obvious – both in the budget justification's numbers and its accompanying narrative – that (the) NCUA is attempting to increase efficiency while improving operations and interactions with credit unions," said CUNA President/CEO Jim Nussle.

But Monterrubio made it clear that the stakes are high.

"Every dollar spent by the agency is a dollar that credit unions are unable to put toward serving their members," he said.

He added, "The past decade has also been characterized by a reduction of credit unions by 25%. How can the agency reduce its staff in a manner that reflects the consolidating industry?"

The proposed 2018 increase of $6.1 million represents a 2.1% increase from 2017. The agency also projects a 2019 budget of $302.8 million, a $4.6 million increase from the proposed 2018 level.

Under that plan, the agency's Albany, N.Y., office is slated to close on Dec. 31, 2018, with the agency's Alexandria, Va., headquarters handling most of the states supervised by the Albany location.

The proposed budget also calls for a net reduction of 42 full-time equivalents in examiners. That reduction will be spread among all regional offices and is part of the agency's plans to extend the exam cycle for certain credit unions and the agency's internal reorganization.

In explaining the budget, the NCUA said that 74% of agency spending goes to pay and benefits. In accordance with the agency's collective bargaining agreement, the budget includes merit and locality pay increases for 1,188 employees.

The agency represents a $1.7 million increase for contracted services, with much of it going to capital projects.

"There are fewer credit unions, but they are larger and more complex, which creates different risks and process needs for the NCUA," the agency said, in explaining the budget.

But trade groups said there is room for efficiency.

"We have heard from our member credit unions that the NCUA sends an excessive number of examiners into a credit union," Diana Dykstra, President/CEO of the California and Nevada Credit Union Leagues, said. "In many instances, the number of examiners is not warranted or justified."

Beverly Zook, president/CEO of Money One Federal Credit Union, said while the plan to extend the credit union exam cycle is commendable, she asked the board to specify a "reasonable time-frame by which my credit union can start experiencing a meaningful reduction in both the number of examiners that come to my credit union, and in the number of days they spend onsite."

Zook's credit union is located in Largo, Md., and has almost $130 million in assets.

Nussle also questioned the NCUA's personnel costs.

"The cost per full-time employee continues to increase substantially faster than inflation and marginally faster than the increases for credit union employees," he wrote.

He added that while the difference is not large over a one-year period, if it is maintained there will be a significant difference between the regulator and the regulated.

"The NCUA could find savings by relying more on state regulators," the Cooperative Credit Union Association said in its comments.

"There is … a significant overlap in state and federal share insurance examinations," the association said.

The association urged the NCUA to "increase its confidence in the local regulatory scheme to which it contributes and often drives."

The association also urged the agency to be more transparent in how the $15 million investment in information technology will help move the agency toward virtual exams.

Trade groups also said the agency must be careful in folding the duties of the Office of Small Credit Union Initiatives into a new Office of Credit Union Resources and Expansion. The budget also includes a plan to eliminate Economic Development Specialist Training.

Nussle said that many smaller credit unions have benefitted greatly from the economic development training. He said that the budget does not include a large number of details about the reorganization, adding that EDS training was a crucial part of the small credit union office.

"While the focus on cost savings is laudable, it is clear a significant number of smaller institutions remain stressed in the current low-rate, hyper-competitive environment, and access to OSCUI resources can be a game-changer and a critical resource for the survival of many credit unions," Nussle wrote.