ALEXANDRIA, Va. — The NCUA Board on Tuesday approved an adjustment to the regulator’s 2012 operating budget that will apply $2 million in savings to the 2013 budget.
“I hope today’s action sends a positive message to credit unions that for the third consecutive year, NCUA is returning $2 million in savings from the current budget to offset next year’s budget,” Board Chairman Debbie Matz said at the Tuesday board meeting.
The revised 2012 annual operating budget is $234,854,336.
“One industry official has suggested that every dollar spent on the NCUA budget is one dollar less that credit unions can spend on member service. But I strongly disagree: Effective regulation saves credit unions money, by minimizing losses to the Share Insurance Fund,” Matz said.
“Over the past three years, through the hard work of NCUA and credit unions, along with an improving economy, the credit union industry has been spared over $1.5 billion in losses,” she said.
Despite total staffing increasing by two fulltime positions, the $2 million savings was realized in employee pay and benefits, which had a net decrease of $3.67 million.
That was offset by a net increase in contracted services of $997,900, which included the transfer of $700,000 worth of pay and benefits to contracted services in the Office of Chief Information Officer, and an additional $120,000 to purchase software required to address Government Accountability Office findings.
The travel budget experienced a net increase of nearly $450,000 due to an increase in the number of trips and an increase in the average cost per trip, according to the Board Action Memo. Rent, Communications and Utilities increased by $202,000 and the Administrative budget had a net increase of $25,000.
The Temporary Corporate Credit Union Stabilization Fund also requested that $400,000 be reprogrammed from pay and benefits to fund additional contractor support due to fulltime vacancies and continuing supervision needs of the NCUA Guaranteed Note Program. The move will not affect the total TCCUSF budget.
“We project no Share Insurance Fund premium for the second straight year,” Matz said. “And as (Chief Financial Officer) Mary Ann (Woodson) reported earlier this morning, the Fund’s equity ratio is holding steady at the maximum operating level.”
After the fund receives it capitalization deposit later this year, the NCUSIF’s equity ratio will be 1.30%.
The NCUSIF experienced no insurance losses during the month of June, with just $37.4 million in losses during all of 2012, offset by a $1.3 million June gain. The fund earned a net income of $7.1 million from gross revenues of $17.4 million and total operating expenses of $11.6 million the agency said.
However, the number of CAMEL Code 4 and 5 credit unions increased by three during the second quarter, for a total of 399, and representing 3.20% of insured shares. One of the lower-rated credit unions has more than $1 billion in assets, increasing the number of CAMEL 4 or 5 institutions of that size to seven.
CAMEL 3 credit unions also increased during the second quarter, from 1,662 to 1,679; however, the percent of shares in this group dropped to 14.66%, down from 15.13% in the 1st quarter.