NCUA to Seek Comments on Overhead Transfer Rate, Operating Fee in January

Reporting from CUNACredit unions will have the opportunity next year to comment on the methodologies used by the National Credit Union Administration for calculating its overhead transfer rate (OTR) and operating fee. NCUA Chair Debbie Matz said she will call for a board vote in January 2016 to publish both methodologies as public notices in the Federal Register.

For fiscal year 2015, the NCUA made substantial revisions to the way they determine the OTR without seeking stakeholder input. These changes led to the Administration drawing a record amount of its operating budget from the Share Insurance Fund—70% in fiscal year 2015, compared to 59% the previous year.

“We welcome the opportunity to give input on what we believe is a flawed methodology,” said John Trull, AVP of Regulatory Advocacy for the NWCUA. “Earnings from the Share Insurance Fund belong to credit unions and should be allocated to pay down debt associated with the corporate crisis or paid as a dividend to credit unions.”

The OTR is designed to cover the NCUA’s costs of examining and supervising risk to the share insurance fund, and the operating fee covers the portion of operational costs for non-insurance related aspects of operating the agency.

 “Publishing these notices in January 2016 would provide ample time for interested parties to share their views before the NCUA Board considers a 2017 budget at an open meeting in November 2016,” Matz said. “We also plan to publish a Federal Register notice in January 2016 with a multi-year draft NCUA Strategic Plan, which will drive the agency’s budget process over several years.” 

The NCUA recently added information to its budget resource center regarding the OTR and operating fee.

Questions about this story? Contact James Pearson: 206.340.4790, jpearson@nwcua.org. 

Posted in Advocacy News, NCUA.