(Nov. 19, 2021) A $345.3 million 2022 proposed budget, funded partially from an increased amount of funds transferred from the federal credit union savings insurance program, was posted this week by NCUA; a public briefing is set for Dec. 8, the agency said.
According to NCUA, its budget for next year is 1.2% higher than the previous year’s. However, components of the overall spending plan show significant changes from the previous year. For example, the agency’s capital budget (which funds such things as purchases of new equipment) is down 30.7% from the previous year (for a total of $13.1 million). The administrative budget for the National Credit Union Share Insurance Fund (NCUSIF) is down by 21.7% (to $6.2 million) from the previous year.
The overhead transfer rate (OTR), which provides funding for the NCUA’s “operating budget” of $326 million (and makes up 94.4% of the overall agency budget) will be set at 63.4%, according to the budget papers posted by NCUA. Essentially, that means the nearly two-thirds of the 2022 “operating budget” (or $206.7 million) will be paid out of the share insurance fund. The remainder of the operating budget comes from “operating fees” paid by federal credit unions.
The 2021 OTR, adopted in December last year, was 62.3%. NCUA acknowledges in its budget posting this week that the 2022 OTR will be 101 basis points higher than the previous year’s.
The OTR represents money that is transferred from NCUSIF to the operating budget of the agency to cover “insurance-related” expenses of the agency. The remainder of the operating budget is covered by the operating fee paid by federal credit unions.
NASCUS President and CEO Lucy Ito pointed out that the proposed 2022 OTR will be the second year in a row that the OTR has been increased by the agency. She also noted that, as the 2021 OTR was approved last December, that NCUA needed to reconsider how it allocates expenses.