The "overhead transfer rate" (OTR) by NCUA is explained in this very brief video in simple terms. The video details the mechanics of the OTR, and its impact on state-chartered credit unions
Video details purpose, mechanics of OTR
JULY 22, 2015 -- The “overhead transfer rate” (OTR) – the ratio that NCUA applies in transferring money from the National Credit Union Insurance Fund (NCUSIF) to the agency’s operating fund to cover “insurance-related expenses” – is explained in a new video by NASCUS, in simple, brief terms.
The 1.25-minute video describes the elements and mechanics of the OTR, as well as its impact on state-chartered credit unions.
Specifically, the video notes that:
- While the OTR has been expanding over the last three years, federal credit union (FCU) operating fees have declined over that period by $14.3 million;
- That has, in turn, reduced FCU out-of-pocket expenses;
- Giving FCUs a singular advantage, and negatively affecting the competitive position of state-chartered credit unions relative to FCUs.
“We settled on this approach to afford a simple and concise way to explain the OTR,” said NASCUS President and CEO Lucy Ito. “The OTR is a crucial issue to our members, as it has important implications to the balance of the dual-chartering system.”