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Feedback Request Regarding OTR, Other NCUA Issues

Credit union feedback on regulatory issues is requested in advance of the Missouri-Kansas Hike the Hill visit with National Credit Union Administration (NCUA) Chairman Deborah Matz. 

Credit union leaders from the Missouri Credit Union Association (MCUA) and Kansas Credit Union Association (KCUA) will meet at NCUA on October 20. It is expected the group will address concerns ranging from the Risk-Based Capital Proposal (RBC2), which the NCUA Board is expected to vote on October 15, to the proposed Member Business Lending Rule and Overhead Transfer Rate (OTR). A new Field of Membership (FOM) Rule is also anticipated in late fall.

Overhead Transfer Rate (OTR)

Part of the NCUA budget is paid by federal credit unions via the annual operating fee. The other part of NCUA’s budget is paid for by transferring funds from the NCUSIF (the overhead transfer rate), which is supported by all federally insured credit unions. In 2011, the OTR to cover NCUA expenses associated with insurance-related functions of NCUA’s operations was 58.9%. Today it is 71.8%.

The NCUA Board must determine what federal credit unions will pay next spring as their operating fee. Any unspent money collected in 2014 to pay for 2015 operating fees will go to reducing 2016 operating fees.

On August 31, Chairman Matz announced that she will call for an NCUA Board vote in January 2016 to publish the methodologies as public notices in the Federal Register. This will allow for the mechanisms to be available for public comment.

Your credit union's input is valuable! Please consider:

  • Requesting that the NCUA provide open and meaningful comment on the methodology of establishing the OTR and operating fee;
  • Urging the NCUA to revise the methodology to provide for a fair and equitable distribution of costs between federally chartered and federally insured credit unions. The state system should not subsidize the federal regulatory system.
  • If you have specific ideas on how the NCUA should address OTR, send your feedback to Amy McLard no later than 3 p.m. on Friday, October 16. MCUA would like to provide a broad range of input from credit unions across the state during the meeting with NCUA.
  • Providing feedback on RBC2, the Member Business Lending Rule, and Field of Membership (FOM) to share with NCUA. You can also send this to McLard

If you have questions about the NCUA meeting or Hike the Hill, contact Amy McLard, via email or phone, 314.542.1370.