ALEXANDRIA, Va. – NAFCU called on NCUA to freeze the agency’s budget and look for new opportunities to cut spending after two years of big spending increases that increased the agency’s budget by a whopping $45 million, or 27%.
In addition, NAFCU President Fred Becker, in a letter to all three NCUA Board members, expressed growing frustration with the agency’s action over those two years eliminating public input into the agency’s budgeting process. “From the outset when the agency decided to cease conducting budget hearings, I expressed my concern that our credit union members, who fund the agency, would not have the opportunity to weigh in on the agency’s budget,” said Becker. “Every dollar assessed begins with a dollar crossing a teller’s window and when taken adversely impacts a credit union’s ability to serve its members.”
The NAFCU letter comes as NCUA is poised to approve a new budget for 2012 after a $22 million, or 12%, increase in this year’s spending, and a $23 million, or 13% increase in 2010 spending. The new spending has come to support increases in the agency’s examiner staff, as well as to create several new departments, including an Office of the Chief Examiner, an Office of Consumer Affairs, an Office of Minority and Women Inclusion, and renovations to the agency’s headquarters. This year’s budget also will be affected by additional hiring of new staff to oversee the corporate credit union resolution. And even though NCUA agreed to freeze examiners’ pay next year under a new union contract, benefits included in the pact are not expected to result in any cost savings.
“While NAFCU has not had the opportunity to review the agency’s budget, we would question any budget that contained a sizeable increase over last year’s budget,” said Becker.
“NAFCU fully recognizes that the safety and soundness of credit unions is of utmost importance, but in this economic environment, we urge the agency to exercise fiscal restraint. I look forward to hearing from you at the earliest opportunity regarding this critical matter,” Becker noted.
