"More than four years ago, PWC in its report noted that there was 'dissatisfaction within the industry with respect to the NCUA's efforts to communicate and explain the OTR methodology in adequate detail,'" Ito said, quoting the report. "However, the recommendation in the report that the NCUA 'possibly seek feedback' was not included in any materials made public by the agency until last week. Had the agency followed up on that recommendation, the NCUA should have been receiving by now formal feedback on the OTR, which is what our legal analysis finds is required by the agency. It is unfortunate it has taken so long for this view to be revealed by the NCUA – and even more unfortunate that the agency has chosen to ignore the recommendation from the report that the NCUA itself commissioned."

At the congressional hearing, Matz testified that the NCUA would solicit comments on the OTR methodology every three years, but Ito said that isn't good enough.

"State regulators and state chartered credit unions deserve to know what the elements of the OTR are when developed by the NCUA, and have the opportunity to comment on it," she said.

Ito said the 2011 PWC report recommended that the NCUA "check if the OTR decisions are subject to the Administrative Procedure Act and if formal notice or comments are required on its OTR calculation process and results."

"According to the NCUA timeline released Monday, the 'agency's General Counsel had already opined in 2001 on this matter,'" Ito said. "Our members would like to review that 14-year-old opinion, so that they may evaluate the merits of the differing legal conclusions between the NCUA's general counsel, and our outside legal analysis. We urge the NCUA to release the opinion as soon as possible."

The OTR has been a sore subject for several years. In 2007, Henry Wirz, president/CEO of SAFE Credit Union in Manhattan Beach, Calif., wrote to CU Times stating the OTR should be eliminated.

"There is no objective way to determine how much of the NCUA budget is related to the insurance fund and how much is related to other NCUA functions," Wirz said. "Any overhead transfer rate calculation is a guess and the entire process lacks transparency."

He continued, "An examination fee based on assets would be a fair way to allocate examination costs to credit unions. The insurance fund earnings would either increase the fund balance or pay dividends to credit unions. None of the insurance fund earnings would be diverted to pay for the NCUA's budget. The NCUA each year makes an arbitrary determination of how much of its operation should be offset by the overhead transfer rate."