news.cuna.org/articles/107396-cu-comment-on-otr-operating-fee-to-be-sought-in-jan-2016

CU comment on OTR, operating fee to be sought in Jan. 2016

September 1, 2015

ALEXANDRIA, Va. (9/1/15)--Credit 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.

“The additional transparency from the NCUA is welcomed. We hope this ultimately leads to a process that ensures fairness to state and federal credit unions for the allocation of legitimate, substantiated ‘insurance-related costs,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “Ideally, we would like to see the NCUA issue a proposed OTR with request for comment, but this is a good first step.”

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.” 

CUNA has expressed concerns, most recently during the NCUA’s last budget comment period, that the OTR is at an all-time high. CUNA also pushed the agency in November to provide more information regarding the supporting data for OTR decision.

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