The NCUA spends too much money.
That's the message of the letters sent to NCUA Chairman Debbie Matz by CUNA President/CEO Dan Mica and NAFCU President/CEO Fred Becker, in response to the agency's recently approved $200.9 million budget for 2010, a 13% increase over this year.
Mica complained about the 6.5% increase in merit pay and locality adjustments and also urged the agency to spell out how it plans to reduce its budget when the current economic crisis has passed.
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Mica noted, however, that given the current economic circumstances "some increase in the agency's budget to handle safety and soundness concerns is to be expected."
Becker didn't single out specific expenses that he objected to but said that "it is without question that given the considerable increase in the agency's budget and the currently anticipated insurance and stabilization fund assessments, credit unions will have unprecedented budgetary challenges in 2010."
Mica urged the agency to resume holding a public hearing on the budget, a practice that Matz stopped this year. Becker didn't call for a return to the hearing but complained that there is now less transparency on the budget than in previous years.
Becker suggested that the board give credit unions relief by setting the NCUSIF operating level below the equity ratio of 1.3. He noted that Congress gave the agency authority last year to restore the NCUSIF over eight years and this "provides the agency ample means to keep the NCUSIF equity ratio at a legally appropriate level."
NCUA Director of Public and Congressional Affairs John McKechnie said Matz plans to write response letters to both Mica and Becker.
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