GAO report focuses on public participation
in fees set by federal agencies -- including NCUA

SEPT. 22, 2015 -- Transparency and public participation are “especially important” for certain federal regulatory fees – including those collected by NCUA -- because the charges “support a mix of benefits to the general public, not only to fee payers,” a recent Government Accountability Office (GAO) report states.

The report (#15-718, Federal User Fees, issued Sept. 16) focuses on the design and implementation of regulatory user fees. Specifically, the report selected 10 regulatory user fees of six agencies – including the NCUA’s FCU Operating Fee -- for its case study. For purposes of the report, “federal user fees” are defined by GAO as a subset of federal user fees that are charged to regulated entities in conjunction with regulatory activities.

The report notes that there are “diverse stakeholders” among those with interest in the implementation of the fees and the programs they support. Some of these, the report states, are not fee payers. “Public participation entails providing opportunities for all interested parties and stakeholders to provide input, not just regulated fee payers,” the report states.

The report notes that “stakeholder engagement” requirements are clear when agencies issue regulations governing their fees. “The federal rulemaking process provides standards for public notice, opportunities for comment, agencies’ obligation to respond to significant comments, and the need to maintain a public rulemaking record,” the report states. “The public notices and rulemaking record aid public participation in the rulemaking process and provide access to the supporting facts and analyses for the agency’s rulemaking decisions. Examples of fees set through notice-and-comment rulemaking include OCC’s semiannual assessments, NRC’s Part 170 and Part 171 fees, and EPA’s Motor Vehicle and Engine Compliance Program fees.”

Aside from NCUA, other agencies assessed in the report were: Environmental Protection Agency, Food and Drug Administration, Nuclear Regulatory Commission, Office of the Comptroller of the Currency, and the Securities and Exchange Commission. The GAO stated it selected these agencies and NCUA based on their high amounts of fee collections and rulemaking activity and diverse fee characteristics. GAO also stated that it examined stakeholder views on these selected fees and held a multi-agency panel discussion to ensure the broad applicability of the findings.

In June, NASCUS released a legal analysis which concluded that the NCUA Board’s adoption of the overhead transfer rate (OTR) constitutes a rule subject to the Administrative Procedure Act (“APA”) notice and comment requirements. Late last month, NCUA Board Chairman Debbie Matz announced that the board would vote in January 2016 whether or not to publish a notice in the Federal Register and seek public comment on the OTR.

While the GAO report does not directly address the OTR, it does report on actions that federal agencies take when they do not engage in the federal rulemaking process to update fees and allocations. “Agency officials consider which alternative mechanisms are appropriate to communicate information about their fees and fee reviews, and to obtain input from stakeholders and the public,” the report states. “For some fees, agencies publish notices in the Federal Register that are not subject to stakeholder comment. This process is typically used when statutes specify a formula that the agency must apply, and the agency has little discretion in updating the fee rates, such as with SEC’s fees.

“OCC and NCUA officials said their agencies promote transparency by posting information on their websites when fees are updated. NCUA officials also noted using public board meetings to disclose information,” the report adds.

However, the GAO report stated that its review of stakeholder comments from rulemakings and public meetings for these regulatory user fees “showed both support for inclusive fee reviews and fee-setting processes, and concerns that agencies sometimes are not providing enough transparency.”

In its response to GAO (included in the report), NCUA stated that it “understands the importance of user fee design,” adding “the additional questions provided by GAO in the Appendix [to the GAO Report] will be helpful when we determine future annual operating fee assessments.”

Highlights of GAO Report; 1 page
Full GAO report (51 pages)


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