NCUA issues operating fee notice, MDI program update

June 22, 2023

The NCUA board approved a proposal about the agency’s minority depository institution (MDI) Preservation Program and issued a request for comment on its operating fee schedule methodology at its meeting Thursday. The board also heard a briefing on efforts to modernize the chartering process for federal credit unions.

The charter modernization briefing described the three phases of chartering and reviewed goals for the completion of each stage.

NCUA is currently pursuing two new projects to help organize groups to launch new credit unions: modernizing the agency’s chartering process; and creating a provisional charter to provide time for fledgling credit unions to raise the capital it needs to become a fully operational credit unios.

“We applaud NCUA’s efforts to make its chartering process simpler and easier to navigate, thus creating avenues for brand new credit unions,” said CUNA Deputy Chief Advocacy Officer Jason Stverak. “Creating more options for people to join a credit union is a crucial step toward increased financial inclusion and promotion of financial well-being for everyone in a community, and we support efforts to make the process of chartering a new credit union more feasible.”

The agency will begin a provisional charter pilot program to allow organizing group to become a legal entity before being authorized to commence full operations in order to obtain required capital.

NCUA expects to seek input on the provisional charter for a 60-day comment period, as well as launch the provisional charter pilot by the end of the year.

The operating fee notice proposes to increase the threshold below which federal credit unions are exempt from paying an operating fee to $2 million (up from the current 1 million), establish a process to update the exemption threshold in future years credit unions’ annual asset growth.

It also seeks input about whether and how the Board should modify the current three-tier operating fee schedule.

Comments will be due within 60 days of its publication in the Federal Register.

The MDI Preservation Program proposal would amend a June 2015 Interpretive Ruling and Policy Statement 13-1 to reflect the transfer of the MDI preservation program administration to NCUA’ Office of Credit Union Resources and Expansion, update the program’s features, and clarify the requirements for a credit union to receive and maintain an MDI designation.

Comments will be due within 60 days of publication in the Federal Register.