(Dec. 10, 2021) The 2022 budget, and three final rules — on mortgage servicing rights, subordinated debt and the complex credit union leverage ratio — are among the items the NCUA Board will consider at its meeting next week.
In November, the board released publicly its proposed budget for the new year, which called for a 1.2% increase from the previous year’s. However, the components of the 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.
But the agency’s operating budget – which is funded mostly by funds from the National Credit Union Share Insurance Fund (NCUSIF) via the overhead transfer rate (OTR) of a proposed 63.4%, and accounts for 94.4% of the agency’s overall budget – is up 3.6%, according to the NCUA proposed budget for a total of $326 million. It includes 46 new full-time equivalent (FTE) staff positions for 2022 (including 32 regional and specialist credit union examiners). Employee pay and benefits makes up 79% of the operating budget.
(As noted in the item on NASCUS’ comments made during the NCUA budget briefing, the association has pointed out this year’s proposed OTR is the third straight year NCUA has raised the transfer rate.)
The mortgage servicing rights proposal, if finalized, would amend the agency’s investment regulation to permit federal credit unions to purchase mortgage servicing rights from other federally insured credit unions, subject to certain conditions. Describing the proposed rule as “half baked” when it was proposed and released for comment a year ago (and voting against it), NCUA Board Chairman Todd Harper said he could find a way to support a final rule if changes were made.
Also on Thursday’s agenda:
- Share Insurance Fund 2022 Normal Operating Level.
- Final Rule Complex Credit Union Leverage Ratio (parts 702 and 703)
- Subordinated Debt Final Rule (parts 702 and 741).
The NCUA Board meeting is scheduled to broadcast live via the Internet, and to get underway at 10 a.m. ET on Thursday.