NCUA, as part of its annual budget deliberations, acknowledged last week it overcharged federal credit unions by $9 million this year and will be sending refund checks to FCUs next month.
The unprecedented refund amounts to 15% of the annual operating fees paid by all federal credit unions and will be paid in pro rata amounts. So a credit union of $5 million will receive a $160 check, a $100-million CU will get $3,200, and a $1-billion CU will get a $25,000 check.
In addition, the NCUA board approved a budget for next year that would cut spending by about 1.3% to $148 million. That will result in both a reduction in operating fees charged federal credit unions by about 1.3% and in the overhead transfer rate, under which money is transferred from the National Credit Union Share Insurance Fund to pay annual operating expenses by NCUA. The new rate will be 57%, down from the current 59.8%.
NCUA chair JoAnne Johnson said she believes the new budget will balance the need for effective oversight of the credit union industry with fiscal responsibility. "This budget reflects that funds that are utilized by NCUA are focused on our main mission of safety and soundness," said Johnson.
The budget calls for average 4% pay raises for all NCUA employees next year and a staff level of 961 workers. That is down from a high of 1,049 in 2000 and the lowest in a decade.
The budget also includes increased spending on the agency's small CU assistance program, the addition of three new positions to staff it, and a change in name from The Office of Credit Union Development to The Office of Small Credit Union Initiatives.
"This budget sends a very strong message to the credit union community that NCUA recognizes the importance of small credit unions," said NCUA Board Member Deborah Matz, who pushed for increased spending in the program. "To some federal and state legislators [small credit unions are] the icon of the cu movement. That's important for efforts to prevent taxation."
