NCUA approves 2021 budget, operating fee relief
The NCUA board approved the agency’s 2021 budget and a final rule on the annual operating fee assessment. Friday’s meeting was the second day of NCUA’s December board meeting, it approved several rules at its Thursday meeting as well.
Specifically, the final operating fee rule excludes from total assets any loan a federal credit union reports under the Small Business Administration’s Paycheck Protection Program (PPP) or similar future programs the Board may decide to exclude.
“We thank NCUA for taking this action to provide relief to credit unions who are getting much needed capital to Main Street businesses through the Paycheck Protection Program,” said CUNA President/CEO Jim Nussle. “These credit unions stepped up as financial first responders for their member businesses, and this change will ensure those loans do not affect their annual operating fee assessment.”
The final rule also amends the period used for the calculation of a federal credit union’s total assets. Total assets will be calculated as the average total assets reported on the federal credit union’s previous four call reports available at the time the NCUA Board approves the agency’s budget for the upcoming year.
The board also approved the agency’s 2021-2022 budget, totaling $341.4 million for 2021. This is 5.2% less than the 2021 funding level approved by the NCUA board in December 2019 as part of the two-year 2020-2021 budget, and 1.7% less than the comparable level funded by the board for 2020.
The board also received a briefing on the overhead transfer rate and operating fee schedule methodology.
In July the board proposed:
- Clarifying the treatment of capital project budgets when calculating the operating fees;
- Clarifying the treatment of miscellaneous revenues when calculating the operating fees; and
- Modifying the approach for calculating the annual inflationary adjustments to the thresholds for the operating fee rate tiers.
The briefing notes those proposals have been adopted. CUNA submitted its comments on the proposals in October, noting its goal is to ensure a fair distribution of the charges for the supervision of credit unions, consistent with the Federal Credit Union Act, for all credit unions regardless of charter type.