ALEXANDRIA, Va. — The NCUA was busy rearranging buckets in itsbudget, but overall it did not increase credit unions' expensesduring last week's board meeting.

The agency will be spending $200,000 more than planned on publicoutreach and almost $300,000 more on salaries and benefits, theboard decided.

The outreach funds will be used for town hall meetings on theagency's rescue of the corporate credit unions and webinars.

The personnel funds will finance seven positions, including twoadditional staff in the Office of the National Examination Team,which focuses on larger credit unions and has been especially busyin recent months because of the problems in the sand states.

The agency will spend approximately $800,000 less on travel andchanges in the way training is done and fewer conferences areresulting in the Office of Hunan Resources spending $1.8 millionless than anticipated.

The NCUA's budget is $184.17 million.

Also at last week's meeting, the board gave preliminary approvalto rules that clarify how premiums and 1% deposits are calculatedif a credit union leaves or enters the NCUSIF during the year.

Under the proposed rule, for which there is a 30-day commentperiod, if a credit union enters the system a day after animpairment takes effect it does not have to pay the impairment.When a premium is levied as of a specific date, a credit union thatleaves the NCUSIF's premium would be pro rated to cover theirentire time within the system.

In response to a question from Board Member Gigi Hyland, StaffAttorney Elizabeth Wirick said it has received inquiries about theissue from seven or eight credit unions.

Wirick said the changes would impact credit unions that convertto other forms of governance or convert to private insurance orchange their status from privately insured to being part of theNCUSIF.

In another action, the board voted to keep 18% as the topinterest rate that federal credit unions can charge on their loansand credit cards.

Senior Capital Markets Specialist Jeremy Taylor said if theboard didn't keep the 18% cap-the top rate mandated by Congress is15% and is subject to change by the NCUA-it would make it harderfor credit unions to make loans to members who represent a creditrisk. The 18% rate runs through March 10, 2011, at which time itwould revert back to 15% unless the board takes additionalaction.

The board also gave final approval to rules on overdraftprotection to align with rules issued by the Federal Reserve. Therules require credit unions to include monthly and year to datecharges for overdrafts and returned checks. It also requires creditunions to provide account balances on ATMs that include the amountin the account without including funds available through anoverdraft program.

The board also approved finalized rules that will govern itspreviously approved program to have credit unions file call reportselectronically. The program takes effect with the 5300 Call Reportsdue to be filed for the quarter that ends on Sept. 30.

NCUA CFO Mary Ann Woodson told the board that the NCUSIF'sreserve balance was $5.4 billion at the end of June and its netincome was $395 million. This year, the fund's net income has been$137.7 million, compared to the projected amount of $205.4million.
The fund had $19.7 billion in assets at the end of June, comparedwith $23.5 billion at the end of May, as a result of the agencyshifting funds to the recently created Temporary Corporate CreditUnion Stabilization Fund. The NCUSIF's equity ratio was unchangedat 1.3%.

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