Credit unions ask to hold contingency funds amid federal NCUA changes; merger fees to offset costs

The Kansas Department of Credit Unions told the committee it built contingency supplemental requests to respond to reduced federal support from the National Credit Union Administration (NCUA). Julie Murray, administrator for the department, said the NCUA recently reduced staff and that Kansas examiners rely on NCUA-provided examiner training and the MERIT examination software.

"We don't get direct funds from the NCUA, but what they do is we work with them," Murray said, explaining that many state exam functions have been performed in tandem with the federal agency. She told lawmakers that a recent NCUA reduction in force of roughly 27 examiners means fewer paired exams and uncertainty over continued access to the shared software, so the department wants contingency authority for third-party examiner training and replacement software.

The department said fee revenues expected from a merger (Premier Members Credit Union and Merit Trust Credit Union) will produce immediate fee receipts (prorated the first year) and that the fee fund is healthy enough to absorb contingent needs. The department said it would not be seeking additional state general fund support.

Why it matters: the department's contingency planning affects the state’s capacity to continue on-site examinations, maintain examiner qualifications and keep oversight without service interruptions if federal support declines.

Next steps: agency officials said they will monitor federal decisions and only draw contingency funds if necessary; committee members asked for follow-up details about grant recipients and program uses.