Newsroom
November 12, 2015
Berger presses NCUA on budget
NAFCU President and CEO Dan Berger urged NCUA to consider and justify each expense of its operating budget in a letter Thursday, in advance of the NCUA Board's consideration of a 2016/2017 budget next week.
Berger said the budget information NCUA has posted has been "extremely helpful" in explaining how the agency allocates funds from federal credit unions' annual operating fees, and he urged further transparency. However, Berger noted that NCUA's board agenda for the Nov. 19 meeting indicates the consideration of a budget for 2016 and 2017, which NAFCU believes would work against further budget transparency and efficiency.
"NAFCU is deeply concerned that a biennial budget will be inefficient and ineffective because it will yield inaccurate projections that will ultimately have to be refined by the agency after the first year," Berger wrote. "When NCUA utilized a biennial budgeting process from 2008-2011, the agency consistently revised and increased its second-year projected budget."
Berger emphasized NAFCU's continued support for an 18-month examination cycle to cut down on duplicative examination expenses. He pointed out that the risk presented to credit unions today does not expose the National Credit Union Share Insurance Fund to the same degree of risk seen during the financial crisis, when the exam cycle was shortened. He said an 18-month exam program would allow NCUA more flexibility in balancing staff and resources without compromising the safety and soundness of the industry.
Berger also reiterated NAFCU's support for the "NCUA Budget Transparency Act" (H.R. 2287/S. 924), bipartisan legislation that would require a return to public budget hearings and also require the agency to post draft budgets for comment in the Federal Register. Finally, Berger reiterated NAFCU's belief that NCUA examination and enforcement authority over non-credit union third parties is unnecessary and would require too many agency resources and drive up costs for credit unions.
The NCUA Board is set to discuss a 2016/2017 budget and a proposal to reform field-of-membership requirements during its Nov. 19 open meeting. The meeting will be streamed live on the agency's website.
Berger said the budget information NCUA has posted has been "extremely helpful" in explaining how the agency allocates funds from federal credit unions' annual operating fees, and he urged further transparency. However, Berger noted that NCUA's board agenda for the Nov. 19 meeting indicates the consideration of a budget for 2016 and 2017, which NAFCU believes would work against further budget transparency and efficiency.
"NAFCU is deeply concerned that a biennial budget will be inefficient and ineffective because it will yield inaccurate projections that will ultimately have to be refined by the agency after the first year," Berger wrote. "When NCUA utilized a biennial budgeting process from 2008-2011, the agency consistently revised and increased its second-year projected budget."
Berger emphasized NAFCU's continued support for an 18-month examination cycle to cut down on duplicative examination expenses. He pointed out that the risk presented to credit unions today does not expose the National Credit Union Share Insurance Fund to the same degree of risk seen during the financial crisis, when the exam cycle was shortened. He said an 18-month exam program would allow NCUA more flexibility in balancing staff and resources without compromising the safety and soundness of the industry.
Berger also reiterated NAFCU's support for the "NCUA Budget Transparency Act" (H.R. 2287/S. 924), bipartisan legislation that would require a return to public budget hearings and also require the agency to post draft budgets for comment in the Federal Register. Finally, Berger reiterated NAFCU's belief that NCUA examination and enforcement authority over non-credit union third parties is unnecessary and would require too many agency resources and drive up costs for credit unions.
The NCUA Board is set to discuss a 2016/2017 budget and a proposal to reform field-of-membership requirements during its Nov. 19 open meeting. The meeting will be streamed live on the agency's website.
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