NCUA Projects Small Budget Increase, OTR Down But Issues Remain

ALEXANDRIA, Va. — Credit unions, regardless of charter, were given a reason to breathe a little easier last week during NCUA’s Budget Briefing and Public Forum. NCUA Executive Director Len Skiles told participants that the agency was expecting a slight 0.82% increase in the budget for next year at $1.2 million. At the same time, the agency, funded by credit union dollars, planned to reduce the overhead transfer rate from 57% to 54% and potentially lower the operating fees paid by federal credit unions 2% to 4%. Skiles emphasized that “no decisions are made” during the budget briefing and the final budget will be presented during the November NCUA Board meeting.

Credit union groups have long complained of the gap between NCUA’s budget and their actual spending, but the agency has worked to rein that in some. NAFCU President/CEO Fred Becker pointed out during his testimony that the variance by year-end 2006 is expected to be around 5% as opposed to 6.6% from 2005. “From what I can see, you’re doing exactly what Len said you would do a year ago,” Becker said, quoting the executive director from last year’s budget briefing.