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NAFCU: NCUA’s 6.1 Percent Budget Hike Too Costly for Credit Unions
Washington – National Association of Federal Credit Unions (NAFCU) President and CEO Fred R. Becker Jr. today questioned the need for the National Credit Union Administration’s (NCUA) 6.1 percent increase for its 2013 operating budget.
“This year’s $14.5 million increase, which follows last year’s increase, is difficult to justify in the current economic climate. Perhaps most troubling is that $12.8 million of this increase is for a 7.5 percent increase in pay – provided the president approves an increase in the general schedule pay scale.”
“NAFCU has continually urged NCUA to demonstrate greater restraint in its spending to address the agency’s most urgent needs. We also believe NCUA should be more transparent with regard to the budget process. There was planned spending of $236.9 million last year, but that was cut by $2 million in July. NCUA said that would go to offset 2013 operating fees, but we would be hard-pressed to see how that is being carried out. If this 7.5 pay raise, which is in and of itself highly questionable, doesn’t go through, where will that money go, and how will it affect 2014?
“We welcome NCUA’s decision to keep to its current staffing level, but questions remain about the agency’s budget process.”
Additionally, the NCUA staff estimated the 2013 share insurance premium assessment at a range of 0-5 basis points and a corporate stabilization assessment ranging from 8-11 basis points.
Beyond the budget, the board approved an increase of 0.24 percent in the operating fee rate. This is based on expectations of 6.5 percent in federal credit union asset growth in 2012. The overhead transfer rate, or percentage of the NCUA budget funded through the National Credit Union Share Insurance Fund, is being reduced from 59.3 percent to 59.1 percent.
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The National Association of Federal Credit Unions is the only national organization that focuses exclusively on federal issues affecting credit unions, representing its members before the federal government and the public.