ARLINGTON, Va.–NCUA has been told by the National Association of State Credit Union Supervisors that it should provide as soon as possible a “detailed explanation” justifying its refusal to submit the overhead transfer rate (OTR) to notice and comment rulemaking.
The NASCUS demand follows a letter sent by NCUA General Counsel Mike McKenna– by certified mail – to NASCUS CEO Lucy Ito in which McKenna “essentially rejected” assertions by NASCUS that the OTR is a rule under the Administrative Procedure Act (APA), according to NASCUS. Also in the letter, McKenna declined to release a 2003 written opinion for the NCUA Board prepared by the agency’s office of general counsel of the applicability of the APA and its “notice and comment” requirements to the OTR, NASCUS said.
“We are asking for – and the credit union system deserves – a candid and transparent discussion of the administrative procedure surrounding the OTR,” Ito wrote in a letter to the agency. “NCUA has a public duty to justify its actions to stakeholders - beyond a conclusory statement that the agency is not in violation of the APA.”
Ito said that a formal rulemaking procedure for the OTR by the agency would give all system stakeholders the opportunity to evaluate the rate’s methodology before it is finalized, and would “give NCUA the opportunity to incorporate that feedback into an OTR that serves the system in an equitable manner.”
“NASCUS is not advocating for a specific allocation between the OTR and operating fees, but for a refined methodology which reflects a reasoned evaluation of stakeholder concerns,” Ito wrote.
She also noted that NASCUS’ requests for additional information about the formulation of the OTR are intended to give the credit union system a “holistic picture” of the debate over the OTR. “Given the direct impact of the OTR on the allocation of agency expenses across the industry, and the weaknesses that have been identified with the current process during several independent reviews, I believe the credit union system deserves that much,” Ito wrote.