ALEXANDRIA, Va. — Credit unions, regardless of charter, weregiven a reason to breathe a little easier last week during NCUA'sBudget Briefing and Public Forum. NCUA Executive Director LenSkiles told participants that the agency was expecting a slight0.82% increase in the budget for next year at $1.2 million. At thesame time, the agency, funded by credit union dollars, planned toreduce the overhead transfer rate from 57% to 54% and potentiallylower the operating fees paid by federal credit unions 2% to 4%.Skiles emphasized that “no decisions are made” during the budgetbriefing and the final budget will be presented during the NovemberNCUA Board meeting.

Credit union groups have long complained of the gap betweenNCUA's budget and their actual spending, but the agency has workedto rein that in some. NAFCU President/CEO Fred Becker pointed outduring his testimony that the variance by year-end 2006 is expectedto 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,” Beckersaid, quoting the executive director from last year's budgetbriefing.

Skiles explained, “The primary reason you see variance in ourbudget is vacancies.” NCUA has been able to fill open positionssome with 30.5 vacancies year-to-date in 2006 versus nearly 50 openFTEs at the end of 2005. He also pointed out that about 49% ofsenior staff are eligible for retirement in the next five years,though, “normally, they stay a little bit longer than they'resupposed to stay.” It is no secret that NCUA pays its senior staffbetter than the other federal banking regulators, which Becker alsobrought up in his testimony stating that salaries should be cappedat the vice president's level.

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