NEW: Budget Cuts Urged Ahead of November NCUA Meeting
In a letter to the NCUA, CUNA President/CEO Bill Cheney noted that the general financial condition of credit unions has improved in recent years as the country moves past some of its worse economic woes. He also noted that the number of troubled credit unions has declined.
However, he pointed out that the number of credit unions in the system has also declined by 10.8% while the NCUA's budget has expanded by 48.1% between 2009 and 2012. The number of agency employees, represented by full time equivalent (FTE) positions, has risen from 965 to 1,261.5, a 30.7% increase. Moreover, travel costs are up 69% and contract service expenses have mushroomed by 130% during this same time frame, Cheney said.
"The NCUA's budget is funded overwhelmingly by credit unions, and they deserve to have their funds allocated prudently and efficiently to support reasonable safety and soundness objectives," Cheney noted.
He also urged the NCUA to provide more frequent, detailed and useful information to credit unions on the budget, the assumptions supporting the budget, and the connection between the budget and the agency's strategic plan.
The NCUA approved a 2012 budget of $234.8 million. CUNA noted that the NCUA last July moved to reduce that budget by 1% or $2 million, and said this change "was a positive step, although NCUA increased staffing by two positions."
The agency in July also said that "projecting the cost of agency-wide staffing for the remainder of 2012 provides a $3.7 million reduction to the budget. "We are hopeful that statement will hold up," Cheney said.
CUNA also urged the agency to provide more transparency to credit unions about its budget decisions, before and after the budget is adopted in final form, Cheney said. A website detailing NCUA budget information could help create this much needed transparency, he