NCUA Leaves NOL Unchanged; Approves 2023-2024 Budget

The National Credit Union Administration left the normal operating level unchanged at 1.33 percent, with the Board also approving a 2023-2024 budget slightly smaller than the one originally proposed by staff and unanimously advancing a proposed rule designed to provide clarity and ease credit unions’ foray into loan participations and fintech collaborations. The NOL is the desired equity level of the National Credit Union Share Insurance Fund.

The League has urged the NCUA to return the NOL to its historic level of 1.3%.

Regarding the 2023-2024 budget, NCUA staff noted that the input of stakeholders during the budget comment process shaped the final $360.4 million 2023 budget proposal, which represents a 6.2 percent increase over the current year’s budget, down from the 8.1 percent increase proposed in the budget proposal drafted by NCUA staff. That $360.4 million figure consists of the agency’s combined operating, capital and Share Insurance Fund administration budgets. Most of that savings was realized from delayed staff additions, a reduction in the travel-related line-item, and unused funds carried over from the previous budget.

The NCUA’s proposed financial innovation rule would clarify that credit unions acquiring loans through an indirect lending relationship, such as from fintechs, could qualify as the originating lender and be eligible to participate the loan to other institutions. Board members noted that the proposed rule would address issues raised by credit unions with the 2013 loan participation rule. It was also noted that, if adopted, the rule could aid credit unions in reaching today’s tech-savvy younger consumers.

Chairman Todd Harper also noted that the agency is readying for a busy 2023, anticipating action on the interest rate ceiling for federal charters, the 2023 annual performance plan, new field-of-membership proposals for federal charters, and a request for information on climate-related risks.

Related: NCUA Approves 2023-24 Budget After Cuts in Travel, New Hires
Related: NCUA Slashes $6.7 Million From 2023 Budget
Related: NCUA Board Approves $360 Million 2023-2024 Budget
Related: Board Approves NCUA 2023–2024 Budget; Issues Proposed Rule on Financial Innovation
Related: Loan Participations, Fintech Proposal Out for Comment; Aim is to Respond to CUs Being the ‘Left-Handers’ of the World
Related: NCUA Board Meeting Coverage: Board Votes to Set NCUSIF NOL at 1.33% for 2023
Related: Here’s What NCUA Plans to Spend Over Next 2 Years