A 2023 budget of $360.4 million – an increase of more than 6% from the previous year – was approved unanimously by the federal credit union regulator’s board Thursday, which also included an additional 18 staff positions.
According to the National Credit Union Administration (NCUA) Board, the “operating” portion of its budget agency – which includes administration and examination activities – will be increasing by $24 million in 2023, an increase of 7.5% from the previous year, to $344.1 million. The operating budget makes up the lion’s share of the agency’s annual spending plan. The other two portions, capital and share insurance fund, are seeing mixed revisions.
The capital portion, financing new equipment (among other things), is slated to decline by 13.7% to $1.8 million. The share insurance fund portion (which finances the operations of the National Credit Union Share Insurance Fund [NCUSIF]) is rising by 6.2% to $20.9 million in 2023.
Total positions at the agency for the New Year will rise to 1,214, up from 1,196 approved for 2022.
The agency funds its operations primarily through two sources: an operating fee charged to federal credit unions (FCUs), and a transfer to its operating fund from the earnings of the NCUSIF, to cover “insurance-related” operations of the agency.
NCUA said the 2023 operating fee would be 1.8% less than in 2022, for total reduction of $15 million. Overall, the agency expects to collect $116.3 million in operating funds from FCUs in 2023.
For the transfer from the insurance fund (known as the “overhead transfer rate”) the agency expects the insurance fund to finance 62.4% of its operating fund, or about $214 million.
The “normal operating level” (NOL) of the insurance fund – the level of reserves to total insured shares at which the NCUSIF is considered funded to cover expected losses without incurring an insurance premium – will remain unchanged at 1.33%.