ALEXANDRIA, Va.—The question of whether to publish NCUA’s overhead transfer rate (OTR), operating fee schedule and strategic plan in the Federal Register for public comment will come up for a vote at this Thursday’s open board meeting.
Last week Chairman Debbie Matz confirmed the agency would vote on the OTR issue. The agency’s new frequently asked questions document addressing its new operating budget noted that once the OTR methodologies are published, they will be published “periodically thereafter in conjunction with the NCUA’s Strategic Plan.”
In November the NCUA board, by a 2-1 vote, approved an overhead transfer rate for 2016 of 73.1%, up from 2015’s 71.8%. NCUA’s Director of Examination and Insurance, Larry Fazio, said the primary driver of the increase in the 2016 OTR was an increase in the percentage of insured shares held by state-chartered credit unions (up 0.9% percentage points to 47.7%). Board Member Mark McWatters cast the dissenting vote.
The OTR is designed to cover the NCUA’s costs to examine and supervise the risk to the National Credit Union Share Insurance Fund. The operating fee covers the portion of operational costs for noninsurance-related aspects of operating the agency. NASCUS has continually shared its concerns about the amount of the OTR and how it is set.
“We hope that after the board agrees in January to publish the OTR for public comment in the Federal Register a much more clear picture will emerge as to how and why the agency assigns all safety and soundness expenses to the OTR – and that the agency will consider making meaningful changes as a result of public comment,” NASCUS President Lucy Ito previously stated.