$96.8 million operating budget for 1996, up 4.4%. The growth is to cover a merit pay increase, the purchase of a computer system and other equipment, and filling vacant positions. Although the rise, approved on Oct. 24, is five times as steep as the one approved last year for 1995, the operating fee the agency assesses credit unions may fall 6%. That would be the third straight drop. One reason: The NCUA is going to use $3 million of its $9.6 million operating fund reserve to reduce fees, said chief financial officer Dennis Winans. The regulator has maintained the fund over industry protests for years because its auditor approved of such contingency money. But the auditor recently changed its ruling and said such a pool is more appropriate for private companies, Mr. Winans said. Mr. Winans said the reserve eventually could be lowered to $5 million or less. Some industry representatives think it can go lower. "We've been after them to do that for a number of years, but we'd like to see them go farther," said Patrick Keefe, spokesman for the National Association of Federal Credit Unions. "We're not spitting nails about this or anything, we're glad they did what they did, but we'd like to see it brought down even lower." The NCUA will set the exact amount credit unions will pay for 1996 operating fees at its Nov. 16 meeting, but at least a 6% drop is expected. The fee fell 7.3% this year and 5.9% in 1994. Meanwhile, about half the $4 million budget boost is going toward an average 3.3% pay raise for its 911 employees, Mr. Winans said. The second-largest component of the budget increase is the purchase and installation of a new integrated accounting, human resources, and administrative computer for central and regional offices that is budgeted to cost $1.5 million. The board also approved $310,500 to host a three-day conference in Chicago that will focus on lending to communities that are underserved by financial institutions. The agency plans to spend $165,000 to install Bloomberg investment terminals in each of its regional offices, as well as train an examiner in each post to be an investment specialist. "There's nobody in each regional office with investment expertise now," Mr. Winans said. "This way examiners can call the region instead of calling us" in the central office. The agency also will spend $485,000 to add 6.5 employees at its Alexandria, Va., headquarters. Five of the positions will go toward the Office of Corporate Credit Unions, of which four will be examiner slots and one a deputy director position.
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