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The NCUA Board yesterday finalized its overhead transfer rate (OTR) methodology as proposed in June and will use this new methodology in setting the 2018 rate, which the agency said will be set at 61.5 percent.

The current OTR is 67.7 percent. Had this new methodology been used to set the 2017 OTR, the rate would have been set at 60 percent.

This revised methodology impacts the rate of funds that will be transferred from the National Credit Union Share Insurance Fund to cover the NCUA's operating budget, and increases the operating fee that will be charged to federal credit unions in 2018. The approved OTR of 61.5 percent means that federal credit unions will pay $128.9 million in operating fees, a 15.7 percent increase over 2017's operating fee schedule.

The new methodology puts in place a formula based on four underlying principles and eliminates the examination time survey. As the new methodology was developed, NAFCU consistently advocated for the agency to maintain an OTR formula based on objective and measurable inputs, which is the best way to prioritize fairness, accuracy and equity. However, the agency ultimately moved forward with a methodology unchanged from its proposal.

The agency plans to revisit the methodology and gather additional stakeholder input every three years.

NAFCU has updated its FCU Operating Fee Calculator on its website in the light of the new OTR methodology. This calculator allows credit unions to analyze and compare the amounts of their fiscal 2017 and 2018 NCUA operating fees.

The NCUA Board Thursday also approved the agency's 2018 and 2019 budgets, finalized its rule on corporate credit unions and heard a quarterly report on the Temporary Corporate Credit Union Stabilization Fund. (Read more here.)