ARLINGTON, VA.— Following NCUA’s approval of its 2015 budget today, NASCUS is calling for a public comment period over the agency’s overhead transfer rate (OTR).
NASCUS strongly believes that the methodology for calculating the OTR, or any change to the methodology, should be published in the Federal Registerfor public comment, NASCUS stated in a release.
“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 pointed out that the NCUA board today announced another increase to its OTR from the already “staggering previous year’s rate of 69.2% to 71.8%. At the same time, the NCUA decreased the federal credit union operating fee by $0.72 million, or 0.90%. NCUA’s overall budget increased by 4.2%, NASCUS pointed out.
“The inequitable nature of the high rate is frustrating,” said Ito. “There seems to be no ceiling for this rate.”
NASCUS applauded board member Mark McWatters voting no on all budget-related items, approving of his call for greater transparency and inclusiveness in the budgetary process.
“The other federal bank regulators publish their proposed assessments in the Federal Registerfor public comment pursuant to the Administrative Procedure Act,” Ito said. “It makes sense that NCUA do so as well.”
NASCU noted that for the 2014 OTR, NCUA adopted new mapping of the agency’s 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, NASCUS said.
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