November 20, 2014 – For immediate release
NASCUS Calls for Public Comment Period Over NCUA’s Ever-Increasing OTR
The National Credit Union Administration (NCUA) Board today announced another increase to the agency’s Overhead Transfer Rate (OTR) from the already staggering previous year’s rate of 69.2 percent to 71.8 percent. At the same time, the NCUA decreased the federal credit union operating fee by $0.72 million, or 0.90 percent. NCUA’s overall budget increased by 4.2 percent.
NCUA Board member Mark McWatters voted no on all budget-related items. NASCUS applauds McWatters’ call for greater transparency and inclusiveness in the budgetary process.
“There is clearly a need for transparency in terms of the budget process of the OTR, and that transparency needs to be meaningful,” NASCUS President and CEO Lucy Ito said.
Although the increased posting of budget related materials in conjunction with this year’s Board meeting was a positive step, meaningful transparency requires more than simply making financial statements available to the public. Allowing stakeholders to weigh in on the legal and policy determinations that shape the NCUA’s expense allocation will allow for more equitable and deliberate decisions by the Board.
NASCUS strongly believes that the methodology for calculating the OTR, or any change to the methodology, should be published in the Federal Register for public comment.
“The other federal bank regulators publish their proposed assessments in the Federal Register for public comment pursuant to the Administrative Procedure Act,” Ito said. “It makes sense that NCUA do so as well.”
“The inequitable nature of the high rate is frustrating,” Ito said. There seems to be no ceiling for this rate.”
For the 2014 OTR, the NCUA Board adopted new mapping of NCUA regulations that classified virtually all activities related to safety and soundness as “insurance-related.” By shifting the entire safety and soundness program of the agency to the share insurance fund, NCUA minimizes direct out-of-pocket examination costs for federal credit unions, effectively subsidizing the federal charter.
Elizabeth Kirkland, Director of Communications and Marketing, firstname.lastname@example.org or (703) 528-5974