National Credit Union Administration January 2016 – Federal Register Recent Federal Regulation Documents

The NCUA Operating Budget has two primary funding mechanisms: (1) An Overhead Transfer, which is funded by federal credit unions (FCUs) and federally insured state-chartered credit unions (FISCUs); and (2) annual Operating Fees, which are charged only to FCUs. In a voluntary effort to invite input from stakeholders representing federal and state-chartered credit unions, the NCUA Board (Board) is simultaneously requesting comments on the methodologies for both funding mechanisms in separate notices in the Federal Register. This request for comments focuses on the methodology NCUA uses to determine the Overhead Transfer Rate (OTR). To facilitate comments, the Board is also assembling and describing its existing OTR methodologies and processes, which are also available on NCUA's Web site. The Board applies the OTR to NCUA's Operating Budget to determine the portion of the budget that will be funded from the National Credit Union Share Insurance Fund (NCUSIF). The Board invites comments on all aspects of the OTR methodology and any alternatives commenters may offer. Areas the Board specifically seeks comments on include: Whether the OTR should continue to be determined using a formula-driven approach, or instead be set largely at the discretion of the Board; The definition NCUA uses for insurance-related activities; Adjustments or changes to the current calculation; and Alternate methodologies to arrive at an accurate and fair allocation of costs. To be most instructive to the Board, commenters are encouraged to provide the specific basis for their comments and recommendations, as well as documentation to support their proposed adjustments or alternatives.

The NCUA Operating Budget has two primary funding mechanisms: (1) An Overhead Transfer, which is funded by federal credit unions (FCUs) and federally insured state-chartered credit unions (FISCUs); and (2) annual Operating Fees, which are charged only to FCUs. In a voluntary effort to invite input from stakeholders representing federal and state-chartered credit unions, the NCUA Board (Board) is simultaneously requesting comments on the methodologies for both funding mechanisms in separate notices in the Federal Register. This request for comments focuses on the methodology NCUA uses to determine the aggregate amount of Operating Fees charged to federal credit unions, including the fee schedule that allocates the Operating Fees at different rates among FCUs according to various asset thresholds. While the NCUA Board is interested in all comments from the public and stakeholders, commenters are also asked to consider the following questions when responding: (1) Are the asset determination thresholds reasonable; and (2) is the method for forecasting projected asset growth for the credit union system reasonable? Responding to these questions will provide valuable insight to the NCUA Board with respect to how the Operating Fee is administered. To be most instructive to the Board, commenters are encouraged to provide the specific basis for their comments and recommendations, as well as documentation to support their proposed adjustments or alternatives.