Written by Angela Meyster, Senior Regulatory Affairs Counsel
As the end of the year draws near and we look forward to 2015, budgets are a top concern for both credit unions and their regulators alike. NAFCU expects the NCUA to announce its 2015 Operating Budget at NCUA’s November 20th Board Meeting (agenda released tomorrow).
The NCUA’s Operating Budget is especially important for credit unions to monitor. NCUA is an independent federal agency and does not receive an allocation from the federal budget; instead, the credit unions NCUA insures and regulates are its exclusive source of funds. Accordingly, every dollar the NCUA demands for its budget is one less dollar that your credit union can use to cover its compliance costs, operational costs, data security costs… and the list goes on and on. In short: the NCUA’s budget directly impacts your budget.
In the past, NCUA has released and approved its budget subject to a formal hearing. This is the fifth year in a row that NCUA has not done this, which deprives credit unions an important vehicle for which to comment formally on the agency’s budget and the associated costs for credit unions.
Because NAFCU is focused on ensuring that NCUA, as the steward of credit unions’ dollars, is using its resources in the most efficient way possible, NAFCU has written to NCUA in advance of its 2015 budget announcement to highlight a list of important actions for NCUA to consider taking when setting this year’s budget, including:
- Examining each line item of the budget with a goal of achieving cost savings wherever possible;
- Reviewing successful agency programs and initiatives and re-allocating resources to provide support wherever most efficient;
- Refraining from spending credit union resources on expanding NCUA’s examination authority into non-credit union third parties; and
- Improving public disclosures of NCUA’s management of credit union funds, including through non-aggregated breakdowns of fund expenditures; a list of rules for which the NCUSIF provides funding for implementation and examination; and a list of rules for which NCUA’s operating budget provides funding for implementation and examination.
NAFCU will continue to press NCUA to minimize the cost its budget poses to credit unions and NAFCU will report on the budget once NCUA releases it next week.
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