WASHINGTON The National Credit Union Administration's three-member board split along party lines on Thursday in its approval of a $279.5 million operating budget for next year.
While Chairman Debbie Matz and fellow Democrat Rick Metsger supported the new budget, it drew objections from Republican Mark McWatters, who argued the 4.2% increase from this year was too much.
"As a board, we should remain mindful we are spending other people's money," McWatters said at a board meeting.
The $11.2 million increase is the NCUA's smallest since 2008 and its operating fee rate, which determines the amount individual credit unions pay to support NCUA, will actually decline by 0.9% next year, due to a projected 3.8% increase in credit union assets.
But that has done little to temper the objections of the two largest credit union trade groups, the Credit Union National Association and the National Association of Federal Credit Unions, which have also been critical of the budget hike.
In a statement Thursday, Jim Nussle, CUNA's president and CEO, said his group was "concerned the board has increased the budget yet again. Rather than reducing expenditures, the agency has continued to bolster its budget for eight straight years."
Dan Berger, NAFCU's president and CEO, said in a statement that NCUA "must be more conscious of ways to control its spending and reprioritize current resources efficiently."
The NCUA's budget is funded by the more than 6,300 credit unions it regulates.
Matz declared that cutting spending "wasn't an option." She said the agency needed additional funding to meet the challenge of regulating institutions that are growing larger and more complex.
"Our supervisory expertise has to keep pace with credit unions' expanding operations," she said.
The board also wrangled over issues of transparency, with McWatters saying NCUA must do a better job of detailing its spending, as well as allow credit union industry representatives to comment on the budget. Currently, the board approves the budget without holding any hearings where the public is allowed to comment.
"The public should get the chance to submit written comments and make statements at our meetings," he said. "It might make the process more cumbersome, but it would also be more inclusive and transparent."
McWatters said NCUA's budget has increased by 51% over the past five years, and urged the agency to study the reasons for the increase.
Metsger, however, said the NCUA's budget process has become increasingly open since he joined the board in August 2013, adding that its level of transparency compared favorably to other financial regulatory agencies.
Both Metsger and Matz claimed the NCUA's budget process was more transparent than most of the credit unions it regulated, and Metsger noted that credit unions and the trade groups were vocal in their opposition to a proposal in 2008 to require the disclosure of credit union executives' salaries.
"Most of us think we're transparent and wish the other guy whoever he or she may be should be more transparent. These people aren't really seeking transparency, they want a one-way mirror," Metsger said.
But Carrie Hunt, NAFCU's general counsel and senior vice president for government affairs, said in an interview it was unfair to compare NCUA to individual credit unions.
"They're a government agency," Hunt said. "They do need to be held to a very high standard."
She said NCUA has become more transparent in its budgeting, but she added that more could be done to ensure that "credit unions know how NCUA is spending their money."
