TUKWILA, Wash. – Some state credit union representatives would call the overhead transfer rate issue a volcano waiting to erupt, and that’s exactly what happened in 2001. The explosion was tripped by the NCUA Board’s decision in its Oct. 19 2000-meeting to raise the OTR for 2001 to 66.72% from its historical 50%, and it left in its wake three independent studies on the OTR and one state-chartered credit union petitioning NCUA for OTR rulemaking. Boeing Employees’ CU, in its independent report on the NCUA and NCISIF – “Caught in a Regulatory Vise: The Peculiar Problem Faced by Federally Insured State Chartered Credit Unions” – was the first to find that “the regulatory structure of the NCUA and NCUSIF is not only placing the agency in a position of a conflict of interest, it’s forcing federally-insured, state-chartered credit unions to cross-subsidize federal credit unions.” NAFCU subsequently refuted the findings of the BECU study and asserted they were inaccurate. Boeing ECU followed-up by filing a petition with NCUA for OTR rulemaking that would allow NCUSIF-insured CUs to participate in decisions concerning the OTR. A couple of months later, NASCUS released the findings of its independently-commissioned study of the OTR. That study – “Overhead Transfer: The Authority of the National Credit Union Administration to Allocated Costs to the National Credit Union Share Insurance Fund” – found that NCUA’s authority to set the OTR is restricted by law. Shortly afterwards, NCUA released the findings of its own independent OTR study conducted by Deloitte and Touche accounting firm. The firm upheld NCUA’s calculation method of the OTR. NASCUS responded saying the D&T study didn’t ask the right questions. The association said the company simply conducted the study based on the parameters NCUA gave it. In an historic move, then-NCUA Acting Chairman Dennis Dollar invited credit union groups to comment on the external review of the OTR and to participate in an open budget briefing and public forum for the agency’s 2002 budget. Later in its November meeting, the NCUA Board unanimously approved a decrease in the OTR for 2002 from 66.72% to 62%.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.