Week ahead: Budget proposal, diversity on tap for NCUA board meeting
After years of pushing for the National Credit Union Administration to reduce its budget, the industry is finally getting a little bit of what it wants — but only for a short time.
A draft of the agency’s 2021-2022 proposed budget, released Friday, shows a 1.4% decrease in total spending for next year. Much of that, however, comes from a significant decline in the agency’s capital budget, along with a nearly 25% decrease in travel spending as a result of restrictions related to the pandemic. The budget also includes funding for five new positions and money for Chairman Rodney Hood’s new ACCESS initiative, which was introduced last month as part of the agency’s broader diversification and social justice push.
The reductions won’t be long-lasting, however. The proposed 2022 budget shows a 6.3% overall increase year-over-year, driven primarily by an 8.3% increase to the agency’s operating budget. The capital budget shows a continued decrease for 2022, as does the administrative budget for the National Credit Union Share Insurance Fund.
The NCUA board will discuss the budget on Thursday as part of its monthly open board meeting and at an additional public budget briefing scheduled for Dec. 2.
This week’s board meeting will also include an update on the share insurance fund and a proposed rule on interest capitalization, along with a briefing on NCUA’s annual diversity self-assessment. Participation in the survey remains low and NCUA has considered a variety of ideas about how to increase participation, including possibly incentivizing CUs to take part. The self-assessment is likely to be especially prominent this year in the wake of a national conversation surrounding race, diversity and social justice, and Thursday’s meeting could reveal next steps for the survey.
Lastly, the House and Senate are both in session this week but with minimal business impacting credit unions. Democrats will maintain control of the House in the next Congress, but a pair of races in Georgia will determine which party has the edge in the Senate. The Credit Union Legislative Action Council plans to support Republican Sen. David Purdue for a full-term seat, according to a spokesperson from the Credit Union National Association, but the PAC “has not yet made a determination on whether to participate in the special election runoff.”
CULAC spent more than $7 million in the 2020 election, with over $3 million of that spent on independent expenditures supporting 11 candidates.
The result in Georgia could be particularly important for any chances the industry has of advancing credit union priorities, noted Geoff Bacino, a credit union consultant and former NCUA board member.
“With two seats left to be decided…the ability to thread the needle becomes even more important,” he said via email last week. “In some ways, having a White House and a Senate from different parties may force some compromise and the different governing style that President-elect Biden will bring to the job may also lend itself to deal-making. In the end, the best argument will still win out — the question is whether credit unions can get their issues, and the best argument, to the top of the legislative heap.”