Final approval of its 2018-19 budget, as well as a final rule on corporate credit unions and the methodology used for transferring funds from the savings insurance fund to cover expenses related to that fund for the next year, will be considered by the National Credit Union Administration (NCUA) Board when it meets Thursday (Nov. 16).
The agency publicly released its Nov. 16 open meeting agenda Thursday. The board will also hear a report on a temporary fund set up during the height of the financial crisis to cover expenses related to liquidating and resolving corporate credit unions.
The agency has proposed a 2018 overall budget of $321 million. The “operating budget” is a subset of that, which covers the operations of the agency (including examinations) and amounts to $292 million.
The final rule on corporate credit unions would modify approaching capital framework benchmarks established in 2010 as part of the regulatory restructuring of the corporate system.
The methodology for the transfer of funds from the earnings of the National Credit Union Share Insurance Fund (NCUSIF) to cover operating expenses of the agency that are “insurance related” is known as the “overhead transfer rate” (OTR). Under a proposal issued in June, NCUA would adopt what it termed a “simplified approach” reflecting that “safety and soundness is not the sole domain of the insurer.” The annual rate would be set at 60%, down from the 2017 rate of 67.7%, and the lowest rate since 2013 (when it was set at 59.1%). The average rate over the past 16 years is 61.2%; from1986-2000, the OTR was 50%.