Credit union trade groups weighed in on a series ofhotly-contested proposals passed by the NCUA Thursday during acontentious board meeting.

The meeting’s agenda included proposed changes to field ofmembership reform, which NAFCU President/CEO Dan Berger applaudedin a post-meeting press release.

“As commerce and consumer behavior continue to rapidly evolvewith innovative technologies, we are pleased to see that the agencylistened to our member credit unions’ suggestions on how to keeppace with today’s marketplace,” he said of the comprehensivechanges. “NAFCU is carefully reviewing the proposal and we lookforward to working with [the] NCUA to ensure that this ruleprovides requisite regulatory relief for federal creditunions.”

Similarly, CUNA President/CEO Jim Nussle called the proposedchanges “sensible” in a press release. He said the rule “stayswithin the confines of the Federal Credit Union Act all whileensuring American consumers are allowed more options when choosingtheir financial service provider.”

However, the American Bankers Association stepped into the fray with aletter to the NCUA board and others on Wednesday. Incoming ABAPresident Rob Nichols said the changes are outside the scope ofwhat Congress intended, and allow credit unions to move evenfurther away from the narrow common bonds that define theirmission.

Former NCUA Chairman Dennis Dollar told CU Times thatsome credit unions will be disappointed by some of the items leftin place.

“…[T]hey left in place the arbitrary population caps for MSAcommunities and, even though they increased them, for ruraldistricts,” Dollar said. “They could have gone further under thestatute in these areas and several others such as allowingreasonable proximity for physical presence in an underservedarea.”

Dollar, principal partner for Dollar Associates, added the NCUAcould have been more aggressive and still stayed well within thelaw’s provision.

While a 73.1% overhead transfer rate increase was approved, thetransfer of authority to set the rate drew criticism from NASCUSCEO Lucy Ito. In a press release, she said the NCUA is “foregoingresponsibility for safety and soundness as the charterer of federalcredit unions” by shifting “virtually all” safety andsoundness-related expenses to the share insurance fund overheadrate.”

She added that once the issue is published to the FederalRegister in January, public comments may provide a clear picture asto “how and why the agency assigns all safety and soundnessexpenses to the OTR.”

The board voted two-to-one on a two-year budget, which will move the 2016 budget to just under$300 million and increase the 2017 budget to $319 million.

Berger also called for additional transparency on the budgetprocess.

“The agency has not held a public hearing on its budget in sixyears, and credit unions deserve the chance to be a part of theprocess that they ultimately fund,” Berger said.

CUNA also expressed concern that the NCUA has increased itsbudget for the ninth straight year.

“We believe the agency needs to monitor and modernize resourcesto maximize funds and contain costs,” Nussle said.

Both Nussle and Berger urged the agency to move back to an18-month examination cycle for low-risk credit unions. NCUAChairman Debbie Matz said in the meeting that she would considerlooking at the issue after the risk-based capital standards areimplemented in 2019. NCUA Board Member Mark McWatters questionedwhy the agency must wait several years to offer additionalregulatory relief instead of looking at the issue now.