NCUA Boardroom. (Photo: NCUA)
On Thursday, the NCUA Board, meeting for the final time in 2022, approved the 2023-2024 budget totaling $360.4 million dollars. The amount includes the operating budget, capital budget and the Share Insurance Fund administrative budget and comes in almost 2% lower than the proposed budget of $367 million that was presented in October.
"The budget is a consensus document," said Chairman Todd Harper. "Compared to the overall funding and staffing levels shown in the staff draft budget, this budget is now smaller in terms of dollars and staff. However, it is still a step in the direction of achieving the NCUA's mission of protecting credit union members and consumers, maintaining the safety and soundness credit unions, and safeguarding the credit union system and the National Credit Union Share Insurance Fund."
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The number of proposed new staff in the October draft budget was 25 positions. The approved budget allows for 18 new positions "notwithstanding the inclusion of two additional positions in the new Office of Financial Technology and Access," said Harper.
In all, the budget supports a total of 1,214 positions for 2023 and 1,240 positions in 2024.
Proposed Rule on Financial Innovation
In a 3-0 vote, the NCUA Board approved a proposed rule on financial innovation "that would amend the NCUA's regulations on loan participations, eligible obligations, and notes of liquidating credit unions."
The proposed rule changes would mainly impact federal credit unions "by removing current limits on purchases of eligible obligations and by removing qualifying criteria for federal credit unions to purchase non-member loans from federally insured credit unions," according to the NCUA.
The proposed rule's goal is to provide clarity and flexibility to current regulations that could make it easier for credit unions to take advantage of opportunities offered by financial technology.
"These changes would move our regulations into more of a principles-based approach, similar to the NCUA's recent efforts related to derivatives," said Harper. "As I have emphasized before, credit unions should recognize and harness the potential opportunities fintechs may offer them. However, we must also acknowledge the potential risks they pose to credit unions, their members, and the system and develop appropriate guardrails. This proposed rule strikes that balance. It provides flexibility, safety, and tailored relief to credit unions while fostering greater innovation."
According to the NCUA, the proposed rule would also:
- Impose due diligence and risk management requirements on federal credit unions that purchase and sell eligible obligations; and
- Codify a 2015 legal opinion letter on the definition of originating lenders in the loan participation regulation, which applies to all federally insured consumer credit unions. The proposed rule would also make other clarifying changes.
Comments on the proposed rule must be received no later than 60 days following publication in the Federal Register.
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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.
