NCUA Operating Fee Increases Average of 1.13%, Hood Tells Credit Unions
NCUA Chairman Rodney Hood says two major factors contributed to the increase.
The operating fee that the NCUA charges federal credit unions with assets of more than $1 million will increase an average of 1.13%, the agency announced Monday.
Last year, the fee increased an average of 2%.
In a letter to credit union officials, NCUA Chairman Rodney Hood said that two major factors contributed to the increase—the Overhead Transfer Rate Level and changes in the agency’s capital investment program.
Generally, if the OTR increases, the operating fee decreases, Hood wrote. For 2020, the OTR increased from 60.5% to 61.3%, which would have been reflected in a decreased OTR.
However, that decreased is offset by the need for the agency to increase capital expenditures, as well as an increase in the agency’s budget, according to Hood.
The NCUA board adopted its 2020 budget last month; it reflected a 3.9% increase over 2020. The budget included a $3.1 million increase for the capital budget. Agency officials said a major portion of that budget will be used to pay for the first phases of the Enterprise Solution Modernization program, which includes a new technical platform and a centralized system for stakeholders to do business with the agency. The capital budget increase also will help pay for the MERIT examination system, which will replace the old AIRES software.
Federally insured credit unions also are being notified of any adjustments needed to maintain their Share Insurance Fund capitalization deposits at 1% of insured shares.
The operating fee and capitalization adjustment will be combined into one bill and must be paid by April 15, Hood said.