Newsroom

The NCUA Board on Thursday will vote on the agency's 2018 and 2019 budgets, adopt its overhead transfer rate (OTR) methodology and finalize its rule on corporate credit unions, according to its meeting agenda published last week.

The board held a briefing on the agency's draft budgets in October; the budgets project $298.2 million and $302.8 million in spending during 2018 and 2019, respectively. At the briefing, Beverly Zook, CEO of Money One Federal Credit Union, recognized the NCUA's budget transparency, but urged increased efficiency. NAFCU submitted further comments to the agency on its budget late last month.

At its June open board meeting, the NCUA issued a request for comment on its OTR methodology recommendations. The NCUA has proposed revising the methodology to three steps; the agency currently uses an eight-step calculation. The proposed methodology also eliminates the examination time survey. If the proposed methodology had been used in setting the 2017 OTR, the rate would have been set at 60 percent, compared with the current 67.7 percent.

NAFCU has asked the NCUA to retain its current OTR methodology, calling it an "objective formula-based model" that "prioritizes fairness, accuracy, and equity."

Also released during the board's June meeting was the NCUA's proposed rule on corporate credit unions. The proposal would permit corporate credit unions to include all perpetual contributed capital (PCC) as Tier 1 capital if a corporate credit union reaches a new "retained earnings ratio" of 250 basis points. The rule also modifies the definition of retained earnings to include "GAAP equity acquired in a merger" as a component of retained earnings. The NCUA last revised the corporates' regulatory framework in 2010 in response to the fallout from the financial crisis, which included the failure of five large corporate credit unions with investments in faulty mortgage securities.

NAFCU offered its support of the proposal in an August comment letter.

The board Thursday will also hear a quarterly report on the Temporary Corporate Credit Union Stabilization Fund (TCCUSF). The TCCUSF was closed on Oct. 1, and its funds, property and other assets and liabilities transferred to the National Credit Union Share Insurance Fund.