ALEXANDRIA, Va. – The NCUA Board Chairman Debbie Matz told Credit Union Times that the $268 million 2014 NCUA budget is “lean, reasonable and very defensible,” despite a 6.7% increase from 2013.
“Our budget is produced through a zero-based process, so every office starts with zero and has to defend every item and every line in their budget," Matz said on Thursday in an interview after the NCUA board meeting at the agency’s headquarters. "That’s scrutinized at various levels, including the board, and the board sends it back over and over again until we feel that we have a budget that is as efficient and as lean as possible, but that provides the resources that we need to do the job."
“Even though the number of credit unions is going down, the complexity of the credit unions is increasing significantly. The existing credit unions are larger, more complex and more sophisticated. What that means is we need to have more examiners and examiners who are specialized in certain areas and who are extremely well trained to supervise these credit unions,” Matz added.
Matz said the NCUA could have added more examiners but decided to reallocate resources instead, which resulted in a shorter 40-hour exam period in small credit unions.
“We’ve taken the resources that we’re not using in the small credit unions and reallocated them to the larger more complex credit unions that are causing risk to the share insurance fund. As a result, we have not increased our number of employees,” she said.
“Our employees have not had a pay increase in several years as a result of the pay freeze. So now that the pay freeze is lifted, we have included in the budget a reasonable pay increase for all of our employees – our bargaining unit and our non-bargaining employees,” Matz added.
CUNA and NAFCU have advocated for a delay of the new CFPB mortgage rules set to take effect in 2014. Matz said the NCUA plans to enforce the rules next year.
“NCUA, like the credit unions must follow the law and the law says that those regs, most of them will be going into affect in January of 2014 so of course, we will examine for them,” Matz said.
She also explained how the funds from the NCUA’s $1.4 billion settlement with JP Morgan is going to flow into the stabilization fund.
“The money will be deposited in the stabilization fund. They’ll be an analysis of the different securities and a determination about how those funds will be allocated to each of those securities but ultimately it will be deposited in the stabilization fund and will reduce the amount of money that credit unions owe to the Treasury,” she explained.
Matz called the settlement a great holiday present and said the improving economy, assessments that have already been paid and settlements the agency has been able to recover have resulted in no corporate assessments for 2014.