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ALEXANDRIA, Va.-While NCUA had opened up its budget setting process, credit union trade associations were still complaining about the openness of the process for setting the overhead transfer rate. But that changed at the November NCUA Board meeting. Attendees got an earful on the process and credit union economists and financial types were soaking it up. During the lengthy discussion on the OTR, NCUA Executive Director Len Skiles announced that he recommended lowering the OTR to 59.8% from the current 62%. Additionally, he proposed setting the OTR annually. The board unanimously concurred with both recommendations. The modified method of calculating the OTR takes into consideration the value of the states’ work on state chartered credit union examinations, the cost of NCUA resources and programs from the examination and supervision program, the distributions of federal versus state chartered credit unions’ insured shares, and direct operational costs to the NCUSIF. The examiner surveys remain the “key factor” in determining the OTR, but even that was altered by allowing examiners to constantly log how much time they spend doing insurance-related and non-insurance-related work. NCUA consulted with CUNA, NAFCU and NASCUS throughout the amending the OTR rate setting process and several suggestions were incorporated. The credit union trade associations expressed approval of NCUA’s willingness to bring the process to light. During discussion at the board meeting, NCUA Board Member Deborah Matz stated that she thinks it is important to look into other factors, such as the nine states that permit private insurance that are receiving “imputed value” from NCUA via equipment and training given to the state regulators. [email protected]

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