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FOR IMMEDIATE RELEASE | June 23, 2017

NAFCU to Ensure NCUA's Overhead Transfer Rate Methodology Proposal is Fair, Transparent

FOR IMMEDIATE RELEASE

Washington (June 23, 2017) -- National Association of Federally-Insured Credit Unions (NAFCU) Director of Regulatory Affairs Alexander Monterrubioissued the following statement today following the release of the National Credit Union Administration's (NCUA) proposal on the methodology for calculating the overhead transfer rate (OTR).

"It is important to our members that the OTR methodology is transparent, fair and efficient," said Monterrubio. "NAFCU supports the dual-chartering system, and we will always work to ensure that there is an appropriate balance between state and federal regulators. We encourage the agency to avoid tipping the scales in favor of state regulators. At the end of the day, we continue to urge the agency to materially reduce its overall operating expenses, which would in turn reduce the OTR's impact on the share insurance fund and the industry as a whole."

In its proposal, the NCUA suggests revising the methodology to three steps, from its current eight-step calculations. This methodology also eliminates the examination time survey. If this proposed methodology were used in setting the 2017 OTR, the rate would have been set at 60 percent, compared to its current 67.7 percent.

The proposal will have a 60-day comment period. The board said that the proposal will be presented in final form during its November meeting.

The board first published its methodology and sought comments in spring 2016. NAFCU commented on the methodology and again urged the NCUA to be fully transparent about the methodologies behind its operating fees and the OTR, and asked that the agency's board take back oversight of both mechanisms.

The NCUA Board today also:

  • finalized its safe harbor rulemaking with respect to asset securitization, which provides a safe harbor for assets transferred by a federally-insured credit union as part of a securitization or participation (The NCUA issued a legal authority finding credit unions already have incidental power to issue securities.);
  • received a briefing on the Enterprise Solution Modernization Program;
  • issued a final rule on Part 747, Statutory Inflation Adjustment of Civil Money Penalties;
  • issued a final rule on Part 792, Freedom of Information Act; and
  • issued a proposed rule on Part 704, Corporate Credit Unions.

The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation's federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go towww.nafcu.orgor@NAFCUon Twitter.

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