On-Site Coverage: Hyland Says Budget Increase Painful, But Necessary
ARLINGTON, Va. -- While the NCUA's budget increase is unpopular and will be an added expense for credit unions, it's necessary to make up for the agency's past shortcomings in examinations, NCUA Board Member Gigi Hyland said last night.
"The situation for credit unions isn't getting better any time soon. And we are catching up because in the early 2000s there were budgets approved without making long term plans,'' she said at a meeting of the Metropolitan Area Credit Union Management Association.
In a subsequent interview with Credit Union Times she said the agency is choosing to hire the examiners as permanent staffers rather than on less expensive contract basis because the health of many credit unions is "not getting better anytime soon.''
Hyland said in her remarks to the group that some of the additional funds will also be used to improve be agency's information technologies, which were criticized as being inadequate in the agency's most recent audit.
The NCUA's 2011 budget is 225.4 million, an increase of 12% over last year's spending plan of $200.9 million.
Hyland also reiterated her concern about certain provisions of the agency's proposed rule on corporate credit unions.
She objects to the provision that would limit natural person credit unions to joining only one corporate and said in the interview that the provision to encourage members of corporate credit unions to make voluntary payments to the Temporary Corporate Credit Union Stabilization Fund "troubles me as well.''
But she said she would withhold final judgment until she reads all the comment letters and noted in her speech that "I read every single stinking comment letter.''
The proposed rule, for which comments are due by Jan. 28, would also allow corporates to assess annual membership fees and increase the amount of retained earnings and would mandate that the corporate prepare an annual management report that assesses how well it is in compliance with NCUA regulations and an assessment of its internal auditing and control structure.