ALEXANDRIA, Va.–NCUA has released a full set of documents around the Overhead Transfer Rate (OTR) that it uses to calculate the expense of examining state-chartered, federally insured credit unions. That amount is then transferred from the National Credit Union Share Insurance Fund to its operating budget.
The NCUA release of documents comes at the same time the National Association of State Credit Union Supervisors (NASCUS) said it remains “deeply troubled” over how the federal agency is using savings announced recently as part of the “reprogramming” of its 2015 budget.
“We are deeply troubled that NCUA’s reference to the use of savings from its budget reprogramming has been limited to reducing the operating fees for federal credit unions,” said NASCUS CEO Lucy Ito. “Rather than earmarking these savings solely for that purpose, we propose using the savings for reducing the amount of the annual overhead transfer rate. As Board Member Mark McWatters noted in his statement yesterday, ‘Consideration needs to be given to how funds from mid-year budget reductions are allocated and whether they should be used, at least in part, to address OTR issues directly, rather than routinely applied to reduce operating fees to benefit just one group of credit unions.’ We enthusiastically agree, and urge the NCUA Board to genuinely consider this approach.”
During NCUA Chairman Debbie Matz’s testimony before a House committee she remarked that the agency will seek more frequent public input on the OTR “going forward.” Matz further said NCUA will solicit comments on the rate’s methodology “every three years in conjunction with the public review of the agency’s strategic plan."
In response, Ito said the approach is “inadequate. As the legal analysis we released late last month detailed, the OTR is a rulemaking for the purposes of the Administrative Procedure Act. That means, the OTR must be subject to notice – in the Federal Register – and public comment whenever the rate is changed, immediately, just like any rule. State-chartered credit unions deserve to know what the elements of the OTR are when it is developed by NCUA, and have the opportunity to comment on it when the rate changes.
NCUA’s OTR documents can be found here.