State Regulators Fulfill Responsibilities, Maintain Safety and Soundness through Budget Challenges

A special message from Mary Martha Fortney, President and CEO,
May 26, 2010

As the professional association of state credit union regulators, naturally we continue to monitor the ever-changing circumstances of state budgets.

According to the National Conference of State Legislatures (NCSL) March 2010 State Budget Update, state budget gaps are remain significant and downward trends are expected to continue into 2011.

NCSL reports that FY 2010 state budgets closed with a cumulative $174.1 billion budget gap, and 38 states are looking at FY 2011 gaps of $89 billion. To address state budget gaps, many state governments have cut employees and instituted furlough days for government agencies.

As part of the state government, NASCUS’ member agencies have certainly faced challenges related to state governments’ cost-savings measures. There have been many questions posed recently about the impact of constrained state budgets on the examination programs of state agencies.

However, according to our research included in the latest Profile of State Credit Union Regulatory Agencies, there are 397 budgeted state examiner positions, and 374 are filled (nearly 95 percent). Our member agencies tell us that despite the challenges, they are managing, and fulfilling their examination and supervision responsibilities. The continued safety and soundness of the state credit union system is evidence of state agencies’ commitment to maintaining a robust state regulatory system.

Also, remember, not every state is facing state budget challenges. It is case-by-case, state-by-state. But from a systemic perspective, the state credit union system is strong and vibrant. NASCUS will continue to proudly represent the state system and work to ensure that it remains safe and sound and that its interests are represented well here in Washington, D.C. and around the nation.