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NASCUS Chairman Roger Little seems to have gotten his apples and oranges mixed up in his letter to the editor, “The OTR: Here We Go Again” in the Dec. 1 issue. The $9 million refund the NCUA Board announced at its November 18 meeting that saw approval of next year’s budget is based on the projected cash needs of the operating fund by the end of 2005. This amount represents accumulated reserves over many years of overpayment by federal credit unions only. The apples -operating fees paid by FCUs -are based on NCUA’s annual budget and assessed in April while the oranges, the funding of the agency through the overhead transfer rate that is paid by the NCUSIF, are based on NCUA’s actual expenses. That refund to FCUs came right from NCUA’s operating fund balance, which retains nothing of the earnings from the 1% deposit that all federally insured credit unions -state-chartered credit unions included -maintain with the NCUSIF. The fund pays the OTR from month to month – not in a lump sum as FCU operating fees are paid – and thus pays no more than is necessary to fund the actual NCUA expenses for which it is responsible. Happily, in the event that the share insurance fund exceeds its normal operating level at year-end, all insured CUs reap the dividend that NCUA is required to return. David H. Gilbert Chairman, NAFCU Share Insurance, Liquidity and Development Fund Oversight Committee Chairman, Aberdeen Proving Ground FCU Aberdeen, Md.

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