NCUA Board Chairman Todd Harper said, "While the credit union system has, to date, largely weathered the COVID-19 pandemic without considerable economic dislocation, we now have new challenges ahead of us due to rising interest rates, increased liquidity risks and ever evolving cybersecurity threats. In response, the NCUA must maintain an effective examination and supervision program as the agency navigates this period of economic and market uncertainty and fulfills its consumer financial protection responsibilities."

Key themes to the 2023-2024 NCUA proposed budget.

According to information from the NCUA, key operating budget changes included an increase of the operating budget by $30.7 million due to the following:

• $12.9 million for pay and benefits increases, including the cost of adding 25 new staff members;
• $6.1 million for additional contracted services costs;
• $5 million for additional travel-related costs;
• $5 million that results from a decrease in year-over-year carryover funds; and
• $1.8 million for other administrative costs.

The NCUA's proposed budget detailed the need for 25 additional staff to the following areas:

• 17 staff for increased specialist and analysts positions in the field program and headquarter programs;
• Two staff in the Credit Union Resources and Expansion program;
• Two attorneys for ethics and regulatory programs;
• Two staff to support the creation of the Ombudsman Office; and
• Two staff for support in the Offices of the Chief Financial Officer and Minority and Women Inclusion.

During her testimony, Virginia Credit Union League President/CEO Carrie Hunt said she wanted the NCUA to provide a better justification for increasing staff, especially the proposed increase of the number of examiners.

"In studying the NCUA budget justification over, I still do have some questions as to why we are still spending additional dollars for staffing in 2023," she said. "Credit unions fund the NCUA and, of course to be clear, I believe they deserve the efficiencies to pay the least amount as possible and get the biggest bang for their buck to receive the most benefits that the NCUA can provide."

Much of the focus during public testimony was on the proposed increase to the NCUA's travel budget to $23 million.

NAFCU Chief Economist and Vice President of Research Curt Long stressed the association's support of the NCUA board's commitment to transparency surrounding the budget, and also emphasized NAFCU's belief that the NCUA should look at cutting down on expenses.

"NAFCU urges the NCUA to rein in the recent trend of substantial increased budgets," Long said.

CUNA Deputy Chief Advocacy Officer Jason Stverak said, "CUNA believes that the efficiency of the NCUA's operation is essential to responsibly using credit union members' resources as the NCUA seeks to become a world class regulator. We believe there is immense capacity for the NCUA to reduce its footprint, right-size the organization and become a more nimble, stronger, more efficient and more effective regulator."

He continued, "Net income is on track to decline by 30 basis points in 2022. Most economists believe the Federal Reserve's aggressive policy moves are likely to put the nation into recession, which would only serve to magnify these current financial challenges.

"These trends suggest the agency should be laser-focused on budgetary discipline."

Public comments concerning the proposed budget are due to the NCUA by Oct. 28. The NCUA board will vote on the final budget later this year.