America’s Credit Unions’ Luke Martone called on the NCUA to “further enhance” its budget transparency in a letter responding to the agency’s request for comment on its overhead transfer rate (OTR) methodology.
Martone suggested the agency adopt the proposed clarifying language regarding the four categories used in the OTR calculation to help credit unions better understand the methodology. Additionally, he noted that while third-party vendors (TPVs) and credit union service organizations (CUSOs) present some risk to the share insurance fund, it is important the percentage of time and resources the NCUA devotes to TPVs and CUSOs as reflected in the OTR methodology be limited in scope.
“Therefore, we ask the NCUA to consider whether including TPVs and CUSOs together with [federally insured, state-charted credit unions] for purposes of determining the OTR methodology is appropriate,” he wrote. “Alternatively, if the NCUA believes it is necessary to categorize TPVs and CUSOs together with FISCUs, we ask the agency to consider whether a 100 percent allocation for the category is appropriate.”
Martone also urged the agency to seek public comment whenever it considers any changes to the OTR methodology.
“Lastly, and potentially most importantly, it is critical that the NCUA explicitly solicit input on the OTR methodology in conjunction with the agency’s annual budget review process. The OTR is necessary to fund the NCUA’s operating budget. Thus, it is vital that the Board review the OTR methodology contemporaneously with its review of the agency’s proposed budget each year,” he concluded.
Read the full letter. America’s Credit Unions will continue to engage the NCUA on its budget and advocate for greater transparency.
