We appreciate NCUA Vice Chairman Rick Metsger's statement that "it seems reasonable for the NCUA to invite comments on the OTR's application and methodology," as noted in the September 2015 NCUA Report (referenced in the CU Times Sept. 17 article "Metsger Solicits Two-Year Budget").
But later statements made in the piece, and reported by CU Times, left us a bit confounded.
He stated: "Perhaps commenters could persuade us that federally chartered credit unions need to pay more, or maybe state chartered credit unions haven't been paying enough and need to up their contribution," after stating that federal credit unions currently pay 66.4 % of the cost of the NCUA's budget, compared to 33.6% for state charters.
Recommended For You
A closer look at those numbers reveals what they really represent. Wrapped up in that 66.4% paid by federal credit unions is the cost of their charter – 28.2%. Strip that out and federal credit unions are paying 38.2% of the NCUA's operating budget compared to 33.6% by state chartered credit unions. What's the difference? The amount of insured shares held by each type of charter. Both state and federal charters pay for the insurance operations of the NCUA at exactly the same rate – 71.8% (that's the OTR) – based on their insured shares. The real question regarding states and federals "paying their fair share" is whether the 28.2% represents the full cost of chartering federals, or whether some of that cost has been re-characterized as "insurance related" and is now being paid, in part, by state chartered credit unions.
When stakeholders have the opportunity to comment on the OTR next year, we will urge them to focus on the appropriate division between NCUA's roles as regulator and insurer – because that's the real issue.
Lucy Ito
President/CEO
NASCUS
Arlington, Va.
© 2025 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.
