NCUA headquarters, Washington, D.C. Credit/The NCUA
Since 2012, the NCUA's operating fee exemption threshold has been $1 million or less for federal credit unions. To account for the system's growth, the agency is proposing to increase the exemption threshold to $2 million. The NCUA is currently gathering information from credit union industry leaders after it issued a request for comment on the operating fee schedule methodology.
In a letter to the NCUA Tuesday, CUNA officials argued an exemption threshold of $5 million "is more appropriate." While CUNA said it agrees with the NCUA that the threshold should be increased, it's just not enough.
CUNA Senior Director of Advocacy and Counsel Luke Martone wrote, "A doubling of the threshold from $1 million to $2 million is a step in the right direction. However, we ask the agency to go even further by considering exempting FCUs up to $5 million in assets from paying an operating fee. While the amount of the operating fee collected by FCUs between $1 million (or $2 million as proposed) and $5 million is relatively small in the aggregate, it accounts for real dollars that are diverted from serving the members of the nation's smallest federal credit unions — a great many of which serve financially fragile consumers on the lowest rungs of the economic ladder."
In comments filed with the NCUA, the president/CEO of the El Paso, Texas-based GECU, Crystal Long, wrote, "GECU supports the proposed adjustment from $1 million to $2 million to the exemption level below which federal credit unions are not charged an operating fee. By increasing the exemption level, credit unions with lower asset sizes will be relieved from the operating fee, allowing them to allocate their resources more efficiently toward serving their members."
According to a statement from CUNA, officials believe the agency "should commit to offsetting any increase in the operating fee paid by all federal credit unions or those within certain asset classes by a proportionate reduction in the agency's budget, and notes reducing agency expenses would reflect real savings to all credit unions."
In his letter, Martone added, "The current operating fee schedule is regressive; that is, credit unions with a larger amount of total assets pay a lower marginal rate on those assets above the threshold levels for the lower tiers. Given growth and consolidation in the credit union system, we appreciate the NCUA looking into whether such an approach is an equitable method for allocating the operating fee."
The comment period for the proposed changes by the NCUA closed on Sept. 5.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
