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NCUA Board Member Rodney E. Hood Statements During the NCUA’s Public Briefing on the Draft 2023 and 2024 Budget

October 2022
NCUA Board Member Rodney E. Hood Statements During the NCUA’s Public Briefing on the Draft 2023 and 2024 Budget
Rodney E. Hood

NCUA Board Member Rodney E. Hood listens to the presentations during the NCUA's public briefing on the draft staff budget for 2023 to 2024 at the NCUA's headquarters in Alexandria, Virginia.

As Prepared for Delivery on October 19, 2022

Introductory Comments

I would like to thank so many of the NCUA staff who played a part in bringing today’s draft budget before us. I’d like to thank the OCFO team for you hard work, along with many other NCUA staff, including office directors.

The proposed budget adds nearly 25 new employees for the 2023 year. Further, the budget is an 8.1 percent increase year-over-year, not accounting for the unspent funds in 2022.

When I last served on the Board, the NCUA regulated just over 7,500 credit unions. Today, that number is less than 5,000. Even though credit unions are becoming more and more complex, we should always strive to find any efficiencies as we are regulating fewer and fewer institutions.

As I have said before, credit unions are — little ‘d’ — democratically controlled cooperatives, and I certainly am glad that we are allowed democracy in action today by hearing from our stakeholders regarding our use of credit union funds. It is my duty, it’s my responsibility, and I think we, as the NCUA Board, to be faithful stewards of those resources, so thank you to our presenters.

I look forward to hearing your remarks. Mr. Chairman, I yield back my time.

Remarks Following the Staff’s Presentation

While I support having the specialists we need in the field as credit unions become more and more complex, we must ask ourselves what positions can be consolidated, repurposed, or not refilled once an incumbent leaves. In the past, I have called on the Board to consider the need to refill positions once they become vacant.

  • While I admit this may not be the best way to manage the agency, I also have not seen any other alternatives that are better. What other ideas do staff have to keep NCUA staffing levels from growing each year?
  • Further, we should be asking ourselves, when credit unions move to the ONES supervision, what staffing changes should be made to reflect this reality other than just adding new staff?
  • I would note that a couple of the positions proposed result from building out an independent ombudsman office.
    • Do credit unions take advantage of the ombudsman office now?
    • What will credit unions gain from building out this function?
    • How many vacancies exist now?
    • Of the 25 new positions called for in this budget how would management plan to fill these positions when there are numerous vacancies throughout the field program that are impacting the completion of the exam and supervision program?
    • How many exams are now face-to-face?

I know we are significantly understaffed in various areas of operation and adding 25 more employees could put a further strain on some of our operations, including these critically important field program.

Shifting gears, I will also note a large driver of expenses next year are the operations and maintenance of the MERIT platform.

  • When MERIT was conceived, was the Board, before our time, informed that the expenses would be this high for operations and maintenance on a yearly basis? Please be as specific as possible.
  • What are the estimated costs of operating MERIT for the next five years?
  • Last year, we budgeted examiners’ hours for the regions to work with small credit unions. I viewed this as a trial program. When will we know if this effort had its intended effect?

In closing, I look forward to working with my fellow Board Members to come up with what’s most appropriate and expedient, but at the same time, something that reduces the funds that our credit unions must rely upon. I would just note that we at the NCUA are a self funded agency paid for by the credit union system, and so while we may see other agencies in D.C. having upticks in their budget requests and what they are hoping to have, that is largely a function of Congress.

Mr. Chairman, I yield back my time.

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