NCUA Budget

NAFCU continues to urge NCUA to reign in year-over-year budget increases that negatively impact credit unions, namely by threatening the viability of the share insurance fund and reducing the dollars credit unions have to serve their members.

Following repeated requests from NAFCU, the NCUA Board held a public budget briefing in October 2016 for the first time in several years.  During which, NAFCU President and CEO Dan Berger delivered remarks urging the NCUA Board to significantly reduce the agency's operating budget. Read our comment letter to NCUA following the briefing highlighting the adverse effects of the agency's runaway budget.

Although slightly lower than draft numbers, the 2017 NCUA operating budget was still increased 2.5 percent compared to 2016 (totaling $298.2 million) and the 2018 operating budget was increased 4.7 percent over 2017 (totaling $312.1 million).

NAFCU's Position on NCUA's Operating Budget

NAFCU continues to advocate for the NCUA board to discover efficiencies within the agency to help reduce overall operating budget. This should include extending the examination cycle for well-managed, low-risk federal credit unions with less than $1 billion in assets as recommended by the Exam Flexibility Initiative Working Group and supported by NAFCU.

We believe that the continued expansion of NCUA's budget is a dangerous threat to the safety and soundness of the industry, as every dollar credit unions send to NCUA for its budget is a dollar they cannot use to serve their members. The 2017 NCUA budget represents the ninth consecutive year of budget increases, despite the improved economic health and stability of the industry since the 2008 financial crisis.

NCUA should be decreasing its budget as the industry continues to consolidate. With fewer credit unions to examine and supervise, NCUA's budget should be reduced in those areas accordingly.

NCUA Budget versus FICUs

We applaud NCUA's efforts to provide increased transparency in the budget process. Public briefings and solicitation of comment on proposed budgets are an indispensable opportunity for the industry to provide thoughtful input on the agency's expenditures. NAFCU encourages NCUA to continue to hold public briefings while finding ways to cut costs for credit unions.

Background Information

NCUA's operating budget is funded exclusively by the credit unions it regulates and insures. As such, every dollar spent by the agency has a direct impact on the daily operations of credit unions, and is an additional dollar that cannot be used toward the benefit of their members. Since 2008, NCUA has increased its budget every year, resulting in a near-doubling for 2018's budget.

Traditionally, and before the decade-long trend of budget increases, NCUA had public budget briefings. Unfortunately, around the time that NCUA started drastically increasing its budget, NCUA suspended its budget briefings.

In particular, in 2009, NCUA authorized nearly 60 additional employee positions, including 50 additional examiners, bringing the total number of full-time equivalents to approximately 1,020. This was the first time in history that the agency surpassed the 1,000 mark for full-time equivalents. This trend continued in 2010, with an additional 75 positions, including 57 examiners. At this time, the annual public budget hearings were suspended.

Recent Regulatory Comment Letters

Read recent letters from NAFCU to NCUA on this important issue.

October 27, 2017 - Oral Remarks for NCUA's 2018 & 2019 Proposed Budget

November 3, 2016 - 2017 & 2018 Budgets

October 27, 2016 - Written Testimony for NCUA's Public Budget Briefing

Updated December 2016