ALEXANDRIA, Va. (12/16/10)—The National Credit Union Administration (NCUA) should revisit its 2011 budget and “adjust it to reflect the difficult prioritization and fiscal restraint required of all organizations in this economy,” Ohio Credit Union League President Paul Mercer said in a recent letter to NCUA Chairman Debbie Matz. While Mercer in his letter noted that there are several ways in which the NCUA serves credit unions and their members well, the NCUA’s budget process “is not among them.” Mercer specifically criticized the NCUA for denying credit union professionals a voice in the budgetary process, a move that he speculated was taken to “facilitate the huge run up in staff and spending.” The NCUA’s budget, which was approved last month, represents a $25 million increase over the NCUA’s 2010 budget. The 2011 budget dedicates $7 million to pay and benefit increases and $750,000 to enhanced examination and supervisory programs. The NCUA announced this spending increase with little regard for current employment conditions, “the shift toward fiscal restraint by the Obama administration, and the growing micromanagement of credit union spending by NCUA examiners,” the letter said. Mercer in his letter noted that the NCUA’s total budget has increased by nearly $70 million since 2008, a 42% increase. The NCUA has also approved three consecutive budgets with yearly increases exceeding 12%, has added 244 full-time positions, and increased its salary/benefit spending by $44.8 million during that same period. The letter suggested that the NCUA emphasize increasing its own performance over increasing spending, develop ways to spread out the financial burdens that NCUA costs and other related costs place on credit unions, and roll back NCUA spending to pre-2009 levels within the next few years. Also this week, the Federal Deposit Insurance Corporation (FDIC) announced that it is slightly reducing its 2011 budget. However, the FDIC is also aiming for a 2% reserve ratio, which is higher than the NCUA’s targeted reserve ratio of 1.3%. Credit Union National Association President/CEO Bill Cheney has also questioned the NCUA’s 2011 budget in a letter to Matz, expressing CUNA’s concern about the size of the agency’s recently approved 2011 budget increase and employee pay raises. CUNA will continue to press the NCUA to re-evaluate its budget priorities and take steps to bring down its expenditures, Cheney added.