Money Changes Everything

Money and budget: These two little words can strip you of your title as Ms. or Mr. Congeniality in a cocktail-party heartbeat. Kansas State researchers have found that arguments over household spending are the leading cause of divorce in this country. Money Magazine says couples argue twice as much about money than they do that three letter word that ends in “x.”

Arguing over financial issues is right up there with politics and religion in collapsing a conversation. Yet, dealing with budgetary issues is a routine part of our personal and professional lives. Neglect this area and just about everything else can implode, burying you and your dreams in the rubble. It is important to address such issues head-on. The axiom proves true in both business and government.

Every year, credit union managers create and submit operating budgets to their boards for approval. I remember reviewing and approving many such budgets as a volunteer on the board of my Oregon credit union. I was mindful about fulfilling my fiduciary and oversight responsibilities as a board director, asked questions about proposed line items, and continually encouraged staff to improve efficiencies to save money while ensuring effectiveness in meeting members' needs.

After all, like most credit unions, our credit union never published a draft budget asking members for review and comments before acting. The credit union board was entrusted with the responsibility to act in the best interest of its members. I have yet to find a credit union that presents a pre-decisional draft of its budget and expenditures and invites member-owner comments in any public forum.

The NCUA Board is entrusted with the same responsibility when it comes to the use of credit union assets. We are halfway through the first year of our two-year 2016–2017 budget. We will review the remaining half of the 2016 budget this month in our open Board meeting. Later this fall, we will consider a 2017–2018 budget. One of the nice features of our budget process is that it provides both the agency and stakeholders with a longer view into the horizon.

I embrace a different view than some when it comes to the release and discussion of pre-decisional budget information. My experience as a state lawmaker informs me of the value such briefings can have in illustrating the tremendous thought, debate, challenge and review that takes place over months of budget development. It is an opportunity to demonstrate the rigorous process we undertake at the agency.

As part of my commitment to implement a Continual Quality Improvement initiative across all aspects of NCUA operations, I recently announced that NCUA will hold a public budget briefing in October before Board action on the 2017–2018 budget in November.

Stakeholders are welcome to attend this public briefing and offer their suggestions on the 2017–2018 proposed budget, or to watch it on the web where it will be streamed live. I've instructed NCUA staff to provide best-inclass transparency on NCUA's proposed budget for the October public briefing.

Unlike prior budget briefings, NCUA will release information on its proposed budget before the briefing. This will allow stakeholders ample opportunity to review and analyze the budget before they participate so they can comment with specifics, not soundbites.

NCUA already releases more detailed and transparent information on its budget and operations than other financial institutions regulators. In fact, last year we were criticized by some reviewers of our Budget and Supplementary Materials webpage for releasing too much information. Rest assured, this public briefing will focus on making the best possible information available about the agency's budget process and proposed expense line items, and presenting it in an easy-to-understand way for stakeholders.

Let me be clear that while holding a public briefing ensures that a diversity of viewpoints will be heard, it does not mean that the Board will abdicate its responsibility as the final arbiter. The budgets of independent financial institutions regulators are not set by referendum. Under the Federal Credit Union Act, the NCUA Board is properly given the sole authority and ultimate responsibility to make final budget decisions to make sure that we fulfill our mandate to protect the safety and soundness of the credit union system, ensure compliance with the agency's regulations, and, above all, exercise our fiduciary duties to protect the National Credit Union Share Insurance Fund and the nearly $1 trillion it insures for more than 103 million members.

Finally, let me emphasize that you don't have to wait for a budget briefing if you have specific concerns or questions about NCUA's budget or budgeting process. I meet with people yearround, and I am always open to suggestions on how to improve agency operations and available to answer questions.

That's why I call this process Continual Quality Improvement— it's a dynamic process. It requires regularly asking questions and then listening. NCUA strives to make the most productive use of every dollar in fulfilling its mission. We value input on ways to improve upon that mission. It's never too late, or too early, to share a good idea.

— Rick Metsger