NCUA should increase operating fee exemption threshold to $5M

CUNA fully supports increasing NCUA’s operating fee exemption threshold but believes $5 million is more appropriate than the proposed $2 million, it wrote to the agency Tuesday. NCUA issued a request for comment on the operating fee schedule methodology, which currently uses three asset tiers for natural person federal credit unions.

“A doubling of the threshold from $1 million to $2 million is a step in the right direction. However, we ask the agency to go even further by considering exempting FCUs up to $5 million in assets from paying an operating fee,” the letter reads. “While the amount of the operating fee collected by FCUs between $1 million (or $2 million as proposed) and $5 million is relatively small in the aggregate, it accounts for real dollars that are diverted from serving the members of the nation’s smallest federal credit unions—a great many of which serve financially fragile consumers on the lowest rungs of the economic ladder.”

CUNA believes NCUA should commit to offsetting any increase in the operating fee paid by all federal credit unions or those within certain asset classes by a proportionate reduction in the agency’s budget, and notes reducing agency expenses would reflect real savings to all credit unions.

The comments note the alternatives listed in the request for comment do not provide sufficient information, and CUNA asks NCUA provide specific information on possible changes to the current fee schedule methodology to allow the industry to provide better informed thoughts on any adjustments.