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NCUA Board Member Rodney E. Hood Statement on the NCUA’s 2024–2025 Budget

December 2023
NCUA Board Member Rodney E. Hood Statement on the NCUA’s 2024–2025 Budget
Rodney E. Hood

NCUA Board Member Rodney E. Hood during a meeting of the NCUA Board.

As Prepared for Delivery on December 14, 2023

Thank you, Chairman, and I certainly want to thank all our leaders and staff who have helped prepare today’s final budget. And thank you, Eugene and Jim, for your presentation this morning.

I also want to thank my fellow Board members for working with me on devising this final version of the budget, which I believe is efficient, transparent, and appropriately reflects our needs to effectively perform our mission and fulfill our responsibility to protect the Share Insurance Fund.

You all, while the credit union system remains largely stable in its performance, financial institutions of all types are faced with dealing with several external factors beyond their control, including the high-rate environment, inflation, employment trends, and the liquidity events that unfolded in the banking sector and their resulting impact on the broader financial services industry.

Those conditions, coupled with rising delinquencies and losses and an increase in the number of CAMELS code 3, 4, and 5 credit unions, just goes to highlight the importance of the NCUA making certain we have the appropriate resources to ensure a safe and sound credit union system.

The final budget before us today incorporates adjustments that reflect our commitment to those responsibilities and to realizing effective efficiencies in our spending, and I believe will position the agency well to respond to the challenges before us.

With that, I have a few questions:

The final budget before us today represents a 7-percent increase year over year, which is, I think, more reasonable than the 9.5 percent increase year over year that was initially proposed in the staff budget. A big part of the decrease was realizing a larger carryover into the 2024 budget. Can one of you walk me through how we were able to find the additional $6.2 million we are using to offset the 2024 budget?

Very well, and is it more efficient for both the credit union industry and the NCUA to just apply the carryover to offset the upcoming year’s budget instead of refunding the variance back to the credit unions who paid an operating fee?

And lastly, some of the adjustments to the staff budget included delaying the consideration of some of the requested resources for future budget cycles. For the sake of our commitment to transparency with the industry, can you provide a quick highlight of what items from the initial proposed staff budget might be reconsidered in future cycles?

Thank you and I appreciate that. That concludes my comments, Mr. Chairman. I yield back my time.

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