NCUA Approves Budget, Issues Proposed Rule, and Announces Chief Economist

Logo for the National Credit Union Administration

The National Credit Union Administration (NCUA) Board held its 10th open meeting of 2018 on Nov. 15 and unanimously approved two items: Operating, capital, and share insurance fund budgets for 2019 and 2020 to fund the agency’s essential activities and strategic priorities; and a proposed rule to update fidelity bond requirements for corporate and natural-person credit unions, as part of the agency’s regulatory reform agenda.

Agency Budgets Set for 2019, 2020
Board members approved the budgets for 2019 and 2020. The final 2019 overhead operating, capital, and share insurance fund administrative budgets will be $334.8 million, a 1.1 percent increase from the 2019 funding levels approved by the Board at its November 2017 meeting. The combined budgets for 2020 will be $343.9 million, a 2.7 percent increase from 2019. Operating budgets for both years assume 1,178 full-time equivalent positions. You can click here to view NCUA’s full announcement and a breakdown for operating, capital, and share insurance fund administrative budgets.

The final 2019 Overhead Transfer Rate was set at 60.5 percent (2018 was 61.5 percent), and the operating fees charged to federal credit unions (FCUs) will increase by an average of 2 percent. FCUs cover just over 70 percent of the costs of NCUA’s operations, while federally insured state-chartered credit unions pay just under 30 percent.

Share Insurance Fund Report
NCUA’s chief financial officer briefed the board on the third-quarter performance of the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF posted net income of $93.5 million in the third quarter. As of the end of the third quarter, six federally insured credit unions had failed and share insurance fund losses were $744.9 million. The NCUSIF equity ratio is 1.35 percent. Chairman J. "Mark" McWatters noted this happened without an assessment to credit unions, and that without the merger of the stabilization fund in 2017 an assessment of 13 basis points would have been necessary.

On Nov. 16, the NCUA Board provided more detail on the six credit union liquidations in 2018.

Proposed Rule: Fidelity Bond Requirements
The board issued a proposed rule to amend the fidelity bond requirements, which, among other things will permit a natural-person credit union to extend bond coverage to certain credit union service organizations.

The California and Nevada Credit Union Leagues will review the proposed rule and provide a summary in PowerComment. Comments are due by Jan. 22, 2019.

NCUA Selects New Chief Economist
The NCUA has selected Andrew Leventis as its new chief economist.

Leventis will begin his duties on Dec. 10. He succeeds Ralph Monaco, who is retiring at the end of the year after seven years with the NCUA and more than 26 years in public service.

Leventis joins the NCUA from the Federal Housing Finance Agency (FHFA), where he served since 2005, most recently as deputy chief economist. Prior to his government service, he had extensive private-sector experience as an economist and decision engineer. Leventis holds master’s and doctoral degrees in economics from Princeton University and a bachelor’s degree in quantitative economics from Stanford University.

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