Agency budget, final rule on servicing rights up for NCUA Board action; NCUSIF normal op level, CCULR also slated

The federal credit union regulatory agency’s 2022 budget and a final rule on mortgage servicing rights are two of five items slated for consideration by the agency’s board during its open meeting next week.

Also slated, according to the agenda released Thursday by the National Credit Union Administration (NCUA), are the National Credit Union Share Insurance Fund’s (NCUSIF) 2022 normal operating level (NOL); a final rule on the complex credit union leverage ratio (CCULR) (Parts 702 and 703 of the agency’s rules and regulations); and a final rule on subordinated debt (Parts 702 and 741).

The NCUA Board in November publicly released its proposed 2022 budget, which called for a 1.2% increase from 2021. However, the components of the spending plan show significant changes from the previous year. For example, the agency’s capital budget (which funds such things as purchases of new equipment) is down 30.7% from the previous year (for a total of $13.1 million). The administrative budget for the NCUSIF, the fund that insures credit union members’ deposits, is down 21.7% (to $6.2 million) from the previous year.

But the agency’s operating budget – which is funded by operating fees paid by federally chartered credit unions and funds from the National Credit Union Share Insurance Fund (NCUSIF) via the overhead transfer rate (OTR), proposed to be 63.4% next year – is up 3.6% to $326 million, according to the NCUA proposed budget. That figure includes 46 new full-time equivalent (FTE) staff positions for 2022 (including 32 regional and specialist credit union examiners). Employee pay and benefits makes up 79% of the operating budget.

The mortgage servicing rights proposal, if finalized, would amend the NCUA’s investment regulation to permit federal credit unions to purchase mortgage servicing rights from other federally insured credit unions, subject to certain conditions. Describing the proposed rule as “half-baked” when it was proposed and released for comment a year ago (and voting against it), NCUA Board Chairman Todd Harper said he could find a way to support a final rule if changes were made.

The NCUA Board’s open meeting, slated next Thursday (Dec. 16), is set to begin at 10 a.m. Eastern, publicly viewable via webcast only.

Dec. 16 NCUA Board meeting agenda