WEST PALM BEACH, Fla.-Credit union executives are expressing everything from outrage to fear of examiner reprisals should they express that outrage in the wake of NCUA's announced budget hike.

The agency said it is increasing its budget by more than $22-million in 2011 in order to hire new examiners, raise salaries from 5% to 8%, and to create the new Office of Minority & Women Inclusion-at a time when many credit unions are having to cut staff and freeze pay in order to pay for assessments charged by NCUA.

In response to some of the negative reaction to the budget increase NCUA issued a statement explaining that the generous pay raises set for next year were determined under arbitration, but that explanation did little to soothe credit union leaders.

Michael Poulos, president of Michigan First CU in Lathrup Village, Mich., noted that "Examiners are always telling us to improve our bottom line and to cut costs to do it. It is the height of hypocrisy to tell us to cut costs-which frequently means cutting staff-and then turn around and hike their budget so they can hire more staff and pay out raises we can only dream of offering right now."

In Glendale, Calif., Stuart Perlitsh, CEO of Glendale Area Schools FCU called the budget expansion "outrageous. Our insurance fund money pays for this. Even if I get what I ask for in 2011, I will not receive a 5% raise next year. I guess I just have to do better next year. Oh wait, with the additional assessments to pay the higher salaries, it will be more difficult."

Perlitsh said that even if the agency were to add "5,000 new examiners" it will have little effect beyond building a "bigger and bigger agency that will be nearly impossible to dismantle."

"Will the hiring of two new examiners reduce the number of troubled credit unions by four or five?," continued Perlitsh. " If a number could be put on these new examiners, natural-person credit unions would feel more comfortable in knowing that there is a real plan in place. It would also be nice to know when we can expect some results in the reduction of troubled credit unions."

Perlitsch added, "This is ridiculous, like all government agencies with unions, it is not NCUA's money-so why do they care. They will negotiate anything with unions. There is no incentive to reduce union bargaining power."

In Cincinnati, Art Kremer, CEO of Sharefax CU said he is "very disappointed" in NCUA's proposed 2011 budget, and especially at the agency's position that its hands were tied on salary increases and at the lack of discussion at other cost reductions. "Natural-person credit unions are already paying the price for the mismanagement of corporate credit unions and the incompetence of NCUA regulators."

In hard-hit Las Vegas, Wayne Tew, president of Clark County CU, noted CCCU hasn't given staff raises in two years and has discontinued contributions to its 401 (k) plan. Also in Las Vegas, Brad Beal, CEO of Nevada FCU, said he is respectfully urging NCUA's board to reconsider, calling the budget inrease "unreasonable."

But one CEO was willing to give NCUA the benefit of the doubt, but said more information is needed from his perspective. "If a 5% pay raise is a step in that direction then I'm actually supportive of it if only because I believe that credit unions and the NCUA themselves may benefit from better quality staff in a few instances," said University of Iowa Community CU CEO Jeff Disterhoft.

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