The 'overhead transfer rate' (OTR) in brief from nascus on Vimeo.

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.”

NASCUS legal analysis/OTR subject to notice and comment

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