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Opinion

NCUA must find better balance of accounting versus accountability

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It is no secret that passions flare up when the National Credit Union Administration budget comes up – rightfully so. Credit unions and their members fund every dollar of it, and every expenditure reduces credit unions’ ability to make loans and provide services to their members.

The 2020 NCUA proposed operating budget is $316.2 million – representing a 57% increase in only a decade. Meanwhile, the credit union industry is on pace to consolidate by 32% over that same timeframe.

Credit unions care deeply about all of their members’ well-being, and when the NCUA spends their members’ valuable dollars, credit unions deserve to understand why. Without a true cost benefit analysis of the agency’s spending decisions, credit unions remain powerless to do anything other than express their thoughts, ask questions, hope for the best and then cut a check to the NCUA.

In a few short weeks, NAFCU will be providing comprehensive comments on the agency’s overall budget. We appreciate the NCUA’s commitment to transparency in holding public budget briefings, especially since they began holding them before they were required to do so by law.

Every fall, we can discuss the top-line dollar amount the regulator spends year in and year out, but the real discussion lays in the details – what the money is being spent on, how it is being spent and, most importantly, why it is being spent. The agency has embarked on several programs that have the potential to majorly impact credit unions and NCUA operations, including a multi-pronged retooling of how the agency conducts exams. Programs like these require strong transparency and oversight throughout the process of implementation, and require a periodic look back to determine whether they have resulted in a net positive.

However, a budget is simply phase one toward instilling prudent spending practices, and a publicly held budget briefing is a singular step towards creating a culture of accountability.

NAFCU appreciates the opportunity to express credit unions’ thoughts, appreciations, and concerns on the proposed 2020-2021 budget at the NCUA’s publicly held hearing on Nov 20.

NAFCU is committed to ensuring the NCUA’s management of credit unions’ funds is proper and necessary throughout the entire fiscal year. To accomplish this, we look forward to continuing to work with Chairman Rodney Hood, and board members Todd Harper and J. Mark McWatters closely and thoroughly.

There are many dedicated public servants at the NCUA who work hard to help keep the credit union industry on solid footing. We firmly believe that more discussion, debate and, most importantly, an analysis of what is working and what is not, will result in both a stronger NCUA and a stronger credit union industry.

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