Association to NCUA: Transparency, deeper reliance on state regulators, lengthening exam cycle are all key to fair OTR methodology

MALBOROUGH, MA (April 28, 2016) — The Association has submitted comments to the National Credit Union Administration in response to its request for comments on the Overhead Transfer Rate (“OTR”) Methodology and the Operating Fee Schedule Methodology.

The OTR is at an all-time high level, having increased by more than $21 from 2009 to 2016. More than 70% of NCUA’s total budget is derived from share insurance fund assessments through the OTR

The Association was assisted in the development of its comments by the participation of its member credit unions through a survey released to assess the impact of the OTR and the Operating Fee Schedule on their operations.

The NCUA’s voluntary decision to open the OTR and Operating Fee Schedule to public comment was widely supported.

Association President/CEO Paul Gentile has long advocated for more transparency regarding the calculation of the OTR. The Association’s comments strongly urged that the NCUA permanently adopt an annual cycle of review as well as advance notice and comment prior to amending or changing the OTR methodology in the future.

Comments also addressed the current OTR rule’s definition of what is considered an “insurance-related” activity. The overhead transfer of agency expenses to the NCUSIF must be legitimate, insurance-related costs.

However, it is the position of the Association that the current definition is too broad, as it equates insurance-related activities with safety and soundness, whereby shifting safety and soundness charges to the NCUSIF, and therefore to both federally-chartered and state-chartered credit unions. The Association’s letter urged the NCUA to reconsider its definition of what constitutes an insurance-related activity in order to ensure equity and fairness between the two charters.

The Association also requested that the NCUA more fully rely on its relationship with state supervisory authorities (“SSAs”), and seek further efficiencies from these agencies. Regulators in Massachusetts, New Hampshire and Rhode Island strive to administer high quality, risk-based systems of supervision. The NCUA should increase its reliance on the agreed upon reports and efficient procedures established between the agency and local SSAs.

It was also noted in the Association’s comments that a return to an extended, 18-month exam cycle, under appropriate parameters and in coordination with a deeper relationship with local SSAs, may lower the OTR.

The Association’s comment letter can be read in its entirety at

About Cooperative Credit Union Association

The Cooperative Credit Union Association is a regional trade organization serving as the voice for nearly 180-member credit unions located throughout Delaware, Massachusetts, New Hampshire, and Rhode Island. CCUA member credit unions hold combined assets in excess of $73 billion and serve a collective membership base of more than 4.7 million consumers. For more information, visit


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