League President/CEO Carrie Hunt Asks NCUA to Reconsider Budget Increases, Consider New Strategies in Supporting CUs
League President/CEO Carrie Hunt testified yesterday during the NCUA Board's public hearing on its proposed budget for 2022-2023.
"Credit unions exist to provide provident credit and everything the agency does has a direct impact on that mission," she noted. "Every dollar NCUA requires of credit unions is money credit unions cannot deploy for the benefit of their members and communities."
She encouraged the NCUA Board to carefully consider whether its budget proposal strikes a balance between protecting against risks, while also fostering an environment of innovation that best positions credit unions to succeed.
Hunt urged the NCUA Board to avoid any unnecessary increases and to also consider:
- Whether the efficiencies realized through virtual examinations make unnecessary the proposed hiring of new examination staff.
- A formal advisory council of credit union executives to interact directly with the Board and agency, which could apprise the agency of credit unions' real-world challenges and offer ideas that could move our industry forward.
- A focus on authorizing pilot programs that put to the test real-world innovations within the industry. Pilot programs would prove a particularly useful tool in meeting head-on the marketplace innovations of fintechs.
- A more active role for the agency's Office of General Counsel, which through risk alerts and legal opinions could provide credit unions the necessary guardrails and "regulatory certainty" needed to spur investment and encourage the pursuit of innovative products, services, delivery channels and technologies.
- Whether the NCUA should take a more active look at needed changes to the Federal Credit Union Act and a more active role in supporting those changes.
- A shift in focus in delivering support to small credit unions by looking to industry partners and interested organizations, who through outside grant funding from NCUA, might be better positioned to address small credit unions' needs.
- A suitable metric for measuring the costs borne by credit union members in funding NCUA in relation to the performance and relative success of credit unions within the financial services industry. The NCUA budget has increased by more than $100 million in 10 years, despite a shrinking industry in terms of the number of credit unions. Members are paying significantly more today for examination and insurance than 10 years ago. What should members expect as a return on that "investment?"
"I appreciate the careful consideration and work of the NCUA Board and staff in developing this budget, and the agency’s willingness to engage in meaningful debate related to the budget’s impact on credit unions and their members," said Hunt. "We must raise these important questions, express our concerns to the agency and challenge them to be the forward-thinking regulator we need."
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