Board to consider budget, OTR for 2017
Nov. 10, 2016 -- A revised budget for 2017-18 – and the overhead transfer rate – are both on the agenda for consideration by NCUA Board during its regular, open meeting Nov. 17 at agency headquarters in Alexandria, Va.
The board is considering adoption of a $299.2 million budget for 2017 (2.8% higher than its 2016 spending plan), and a 2018 budget of $313.1 million (a 4.6% bump from the 2017 plan it is considering).
Central to NCUA’s spending plan is how much of it is made up of funds “transferred” from the National Credit Union Share Insurance Fund to cover “insurance-related” operations (or “overhead”). For 2016, the board set an “overhead transfer rate” of 73.1%, which NASCUS criticized. “By shifting virtually all safety and soundness-related expenses to the share insurance fund, it seems to signal that the agency is foregoing responsibility for safety and soundness in its role as the charterer of federal credit unions,” NASCUS President Ito said.
However, in January, NCUA issued a comment call on the OTR (which followed the publication, in summer of 2015, of a legal analysis by NASCUS which found the OTR is subject to formal notice and comment under federal law).
Also last year, the NCUA Board agreed to delegate the power for setting the OTR to the NCUA Office of Examination and Insurance. NASCUS voiced opposition to the delegation last year, and again in October during the NCUA Board’s budget briefing. NASCUS’ Ito told the board members at the briefing that delegating the authority “is an abdication of one of the Board’s most important functions: oversight of the agency’s and the insurance fund’s budgets. Without discussion and oversight of the OTR, there is no check, nor accountability, for the equitable nature of the transfer,” she said. “The OTR is important: the credit union system deserves better than the leadership of the insurance fund delegating away important responsibility of budgetary oversight.”
In other action scheduled for next week’s meeting, the NCUA Board will consider a rule about the Community Development Revolving Loan Fund; hear a report on the share insurance fund, and; review the SIF equity ratio projections and 2017 premium range.