WASHINGTON The Federal Deposit Insurance Corp. approved a 3% budget reduction for 2015 on Tuesday as funding needs for handling troubled banks continue to diminish.
The $2.3 billion budget is down roughly $73 million from 2014 and represents the fifth year in a row that the proposed budget has declined. The 2015 proposal includes a 12.5% decline in funds dedicated to funding the agency's receivership program and a 0.1% increase in funding for its ongoing operations.
"The 2015 corporate operating budget is a reflection of the continued improvement and health in the U.S. banking industry," FDIC Chairman Martin Gruenberg said during the board meeting.
He added that the decline is "largely because of the dramatic reduction in the number of bank failures since 2010, the continuing reduction in the number of problem banks since early 2011 and the substantial reduction in our post failure receivership management work."
As of Nov. 12, there have been 17 bank failures in 2014, compared to 24 in 2013 and 157 during the peak in 2010. The number of problem banks stood at 329 as of the end of the third quarter, which is down from 888 in early 2011.
"No change is expected next year in this downward trend," wrote Steven App, the FDIC's deputy to the chairman and the agency's chief financial officer in the budget proposal.
The FDIC also said the workload for managing assets in liquidation has fallen nearly 80% to $8.3 billion as of the end of the third quarter, which is down from the $41.6 billion peak seen in early 2010.
However, App said that "receivership management workload is projected to remain elevated for several years, however, due to the continuing work associated with post-failure receiverships and loss share agreements being managed by the FDIC."
Total proposed staffing for the FDIC in 2015 is 6,875, down 325 from 2014. The total includes the addition of 61 permanent positions and a reduction of 386 temporary positions.
Proposed staffing for the division of resolutions and receiverships, which made up the bulk of the agency's expansion during the crisis, is 756, a decline of 160 from 2014 and a sharp decline from the 2,460 peak in 2010.
The FDIC budget proposal also included examination staffing of 1,699 with the number of permanent examiner positions unchanged at 1,520 and non-permanent examination staff of 179, a decline of 80 positions from 2014.
"I am particularly pleased we have been able to continue to reduce the total budget while augmenting the resources to new and emerging areas of risk, particularly cybersecurity," Gruenberg said.