NCUA approves 2018-2019 budgets, corporate CUs rule
The NCUA Board yesterday voted to approve its budgets for 2018 and 2019, and finalized its rule to amend regulations that govern corporate credit unions and the scope of their work. NAFCU President and CEO Dan Berger acknowledged the work the board has done to spend credit unions' funds more efficiently.
"NAFCU thanks Chairman [J. Mark] McWatters and Board Member [Rick] Metsger for their commitment to transparency during the budget process," Berger said. "We appreciate the agency's efforts to slow its rate of spending, but encourage the board to pursue additional cost-saving measures that will strengthen the industry."
The NCUA Board Thursday approved $298.1 million for its 2018 operating budget – a roughly 2 percent increase from the restated 2017 budget – and $302.7 million for 2019. The approved budgets were slightly reduced from their initial proposals.
NAFCU, responding to the proposed budgets in a comment letter and in witness testimony, encouraged the agency stay committed to eliminating inefficiencies and redundancies in its operations so that it is not reliant on annual budget increases.
Also during Thursday's open board meeting:
- The board finalized its corporate credit unions rule as proposed, which would permit corporate credit unions to include all perpetual contributed capital (PCC) as Tier 1 capital if a corporate credit union reaches a new "retained earnings ratio" of 250 basis points. The rule also modifies the definition of retained earnings to include "GAAP equity acquired in a merger" as a component of retained earnings. NAFCU supported the rule in an August comment letter, as it would promote "increased certainty and stability" in the credit union system. The NCUA last revised the corporates' regulatory framework in 2010 in response to the fallout from the financial crisis, which included the failure of five large corporate credit unions with investments in faulty mortgage securities.
- A quarterly report on the Temporary Corporate Credit Union Stabilization Fund (TCCUSF), delivered Thursday by NCUA Chief Financial Officer Rendell Jones, showed the stabilization fund's net income for the third quarter was $570.6 million. The TCCUSF was closed on Oct. 1, and its funds, property and other assets and liabilities transferred to the National Credit Union Share Insurance Fund.
- The board finalized its overhead transfer rate methodology. (Read more here)
Get daily updates.
Subscribe to NAFCU today.