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NCUA Approves $291M Budget for 2016, an Increase of 4.1 Percent
Monday, November 23, 2015 6:40 AM

While the National Credit Union Administration’s field of membership proposal got most of the attention at Thursday’s meeting, the agency also approved its 2016 and 2017 operating budget. The board approved a $290.9 million operating budget for 2016, a 4.1 percent increase over 2015.

“CUNA remains very concerned that the NCUA has increased its budget for the ninth straight year rather than propose budget reductions to decrease credit unions' financial obligation to the agency,” said CUNA President/CEO Jim Nussle. “We believe the agency needs to monitor and modernize resources to maximize funds and contain costs. The credit union industry is healthy and strong, and CUNA will continue pressing the agency to be more efficient with credit unions' funds.”

While the budget increased, the NCUA reduced full-time equivalents for 2016 to 1,247, a 1.7 percent reduction. For 2017, the board approved another 4.1 percent increase over 2016, to $302.9 million, and kept the full-time equivalents at 1,247.

The Temporary Corporate Credit Union Stabilization Fund (TCCUSF) budget will be $4 million in 2016, a reduction of 2.4 percent, and $4.1 million in 2017. Both years call for five full-time equivalents, which is the same as it is currently.

The board also voted on the 2016 overhead transfer rate, which is the transfer from the National Credit Union Share Insurance Fund to cover insurance-related expenses of the NCUA’s operations. The board adopted a 73.1 percent rate for 2016, up from the 2015 rate of 71.8 percent.

According to the NCUA, the primary driver of the increase was an increase in the percentage of insured shares held by state chartered credit unions (up 0.9 percent). The remaining 26.9 percent of the operating budget will be paid through the federal credit union operating fee.

The board also approved the 2016 operating fee assessment scale at Thursday’s meeting. The board increased the asset level dividing points for the natural-person federal credit union operating fee scale by 4.75 percent, which is equal to the estimated asset growth. It also decreased the natural-person federal credit union operating fee rates by 0.47 percent, which is equal to the rate adjustment approved by the board. Payment of 2016 operating fees is required by April 15, 2016.

The meeting also included a third quarter report on the TCCUSF, which saw $11.5 million in revenue during the quarter. Cash balances increased in September as a result of the recent settlements, and a repayment to the U.S. Treasury will be made.

Borrowings were down to $1.9 billion, and there is no likelihood of a premium or assessment in 2016.