NCUA official seal NCUA official seal. (Source: NCUA)

While CUNA and NAFCU both applauded the NCUA's transparency of its proposed 2023-2024 budget process, the trade groups submitted letters Friday to ask the agency to trim down the budget and, at the same time, find ways to not add new credit union regulations that could overburden the industry.

The 2023-2024 proposed budget unveiled earlier in October currently sits at $367 million, with proposed additions to staff, increased travel dollars and nearly $13 million to cover pay and benefits cost increases. Most of the budgetary increases reflect the dramatic rise in inflation that is expected to last through next year.

The proposed NCUA budget is an 8.1% increase over last year. One main focus of budget critics has been the increase of the NCUA's travel budget to $23 million.

In his letter, NAFCU Chief Economist and Vice President of Research Curt Long argued the effectiveness of remote examinations during the pandemic should give the NCUA pause on hiking the travel budget by $5 million.

"The agency should reconsider its proposed travel budget because of the effectiveness of offsite examinations over the past several years. The third largest portion of the NCUA's Operating Budget is travel expenses, so considering the lessons learned from 2020, 2021 and 2022 regarding the extent to which supervisory and exam operations can be conducted offsite, NAFCU urges the NCUA to cut travel across the board going forward," Long wrote.

CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak wrote, "As was evidenced over the past two years, cost savings in the area of travel is certainly possible, and does not generally result in any increase in risk to the credit union system."

According to NAFCU, its suggestions for the NCUA to consider during the budget process included:

  • Preserving the strength of the National Credit Union Share Insurance Fund without overburdening credit unions with exorbitant operating fees and returning excess cash from the Operating Fund to credit unions.
  • Continuing to pursue exam modernization efforts, including a hybrid, virtual and in-person exam posture.
  • Reducing costs associated with the Model Examination and Risk Identification Tool and providing realistic estimates for completion and maintenance.
  • Achieving greater transparency regarding cybersecurity expenses.
  • Continuing to support financial inclusion initiatives and engaging in open communication and timely resolution of issues through the newly established Office of the Ombudsman.

Similarly, CUNA stated it is focused on the following areas:

  • Supports the addition of certain positions, including a new one for the Office of Minority and Women Inclusion and special examiners at the regional office level, but questions the need for a net increase of 10 specialist examiners.
  • Urges the NCUA to continue to seek to contain travel costs by use of offsite examination procedures and virtual options for training.
  • Continues to have significant concern around any expansion in consumer protection examination activity, as CUNA members believe altering the agency's risk-focused examination process and substantially increasing consumer examination-related expenditures is not warranted.
  • Urges the NCUA to extend the credit union asset threshold for the 18-month examination cycle from $1 billion to $3 billion.
  • Strongly objects to any suggestion that the NCUA may need to charge a premium in the near future and/or that statutory changes to the share insurance fund funding guidelines are needed.
  • Suggests the agency give credit unions a "more obvious" role in the process of improving examinations, specifically, to develop and conduct ongoing, confidential examination staff satisfaction surveys distributed to credit unions after each examination.

The NCUA board will vote on the final budget later this year.

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Michael Ogden

Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.

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