This article first appeared on CUCollaborate
Previewing their testimony for Thursday’s hearing on the NCUA budget, the two national industry trade groups on Monday said they vehemently oppose the agency’s plan to hire additional examiners to focus on consumer protection.
“Credit unions don’t operate like for-profit banks,” Mike Schenk, CUNA’s chief economist, told reporters during a conference call Monday morning, indicating that banks do not necessarily have consumer protection as their highest priority.
The additional positions will be “duplicative and unnecessary,” NAFCU Chief Economist Curt Long said, during a separate call with reporters.
The NCUA is scheduled to hold a hearing on its proposed 2024 budget Thursday afternoon. Long and Schenk are expected to testify during that hearing.
Budget details
The NCUA last month released a draft budget for next year. It includes a $38 million increase in the agency’s operating budget—an 11% boost over the 2023 spending plan. The budget includes 11 entirely new positions and 17 that have existed but are unfilled. It includes 13 additional consumer financial protection specialists and additional time for consumer protection reviews.
“We are concerned about the increases and where they go,” Schenk said. He said that CUNA specifically opposes the hiring of 13 new consumer protection examiners. He said that the NCUA should recognize that credit unions are “pro-consumer” and that the increased focus is not necessary.
The NCUA budget documents do an inadequate job of making the case for the additional focus, Ann Petros, NAFCU’s vice president of regulatory affairs, said.
“There are no industry trends” that would require the time and money involved in increased consumer protection exams, she added. She also noted that the NCUA routinely includes those issues in its overall examinations of credit union.
The two groups also noted that the CFPB already enforces consumer protection laws.
Otsuka’s a wild card
The NCUA board is scheduled to vote on the 2024 budget at its December meeting. The outcome of that vote may be determined by whether the Senate has confirmed Tanya Otsuka to a seat on the board by then.
The board currently is controlled by Republicans—Kyle Hauptman and Rodney Hood. Both members have been skeptical of the consumer protection focus pushed by board Chairman Todd Harper.
However, Otsuka, a Democratic selection, has been nominated to replace Hood, whose term expired in August.
If Otsuka is confirmed by the Senate in time for the December board meeting, she could deliver the crucial vote that Harper needs to approve the draft budget.
The Senate Banking Committee has voted to send Otsuka’s nomination to the full Senate. However, Brad Thaler, NAFCU’s vice president of legislative affairs said that Senate leaders have not indicated when the confirmation vote will take place.
He noted that the Senate has a backlog of nominations to consider.
And Thaler said that if Otsuka does not participate in Thursday’s budget hearing, NAFCU officials believe that she should recuse herself from any budget vote even if she is on the board when the panel votes on the budget.
