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NAFCU, commenting Friday on the NCUA's 2018 and 2019 budget proposals, recognized the agency for slowing the rate of its year-over-year budget growth and encouraged a continued commitment to efficiency.

NAFCU Director of Regulatory Affairs Alexander Monterrubio told the NCUA in a letter Friday that by providing budget materials for 2018 and 2019, and publishing several years' worth of additional data on capital improvement projects, the agency has created a more transparent and streamlined budget process. "If approved, the budget would mark the smallest year-over-year budget growth in more than a decade," Monterrubio wrote.

The NCUA has proposed $298.2 million in spending for 2018 – a 2.1 percent increase from the restated 2017 budget – and $302.8 million for 2019.

Remarking on proposed budget items and future initiatives, Monterrubio asked that the board address the following questions when it votes on the proposed budgets:

• The proposed 2019 budget represents a 70 percent increase in the agency's expenditures since 2009, when the economic recovery began after the global financial crisis. In what environment, economic or otherwise, would NCUA envision its budget seeing a true reduction?
• The past decade has also been characterized by a reduction of credit unions by 25 percent, how can the agency reduce its staff in a manner that reflects the consolidating industry?
• When will the industry begin to see the cost-savings and economies of scale that are being promised in the Budget?

Monterrubio also provided comments on areas of the proposed budgets that NAFCU supports, including NCUA's reform plan to eliminate, consolidate and streamline offices with similar or overlapping functions, and restructure offices to improve efficiency. He urged the NCUA to evaluate extending an 18-month exam cycle to all well-run, low-risk credit unions regardless of asset size and noted support for the agency's efforts to conduct more remote examinations.

As far as other recommendations, Monterrubio encouraged the NCUA to create a credit union advisory council as an effective way to increase stakeholder input. He also urged that the NCUA return the normal operating level of the National Credit Union Share Insurance Fund back to 1.3 percent and asked that the proposed revisions to the overhead transfer rate (OTR) not be finalized, instead recommending the NCUA build upon the current OTR methodology.

Monterrubio also expressed support for the NCUA maintaining its status as an independent agency.

Throughout Friday's letter were additional comments from remarks by Beverly Zook, CEO of Money One Federal Credit Union, during the NCUA's Oct. 18 budget briefing.