Sources say NCUA may issue for comment new OTR formula

The LSCU has learned that sources close to the NCUA speculate that today, the NCUA will issue for comment a new formula for the Overhead Transfer Rate. Chairman Mark McWatters has wanted more transparency on this and asked for input on possible changes. According to sources, the new proposed formula will be more friendly to state-chartered credit unions, and could result in close to a 10-percent reduction in the rate in future years. Details were not disclosed, but it is possible fewer NCUA activities will be considered insurance related. Our sources speculate this change will be seen as a victory for NASCUS and the state system generally.

The LSCU also has been advised the NCUA board sources predict that the Corporate Stabilization Fund will be merged into the NCUSIF late this year, probably in November-December. This will enable NCUA to avoid assessing an NCUSIF premium. Future rebates to credit unions will be made from the NCUSIF (which will include the Stabilization proceeds), although NCUA sources will not commit to a timetable.
The LSCU will keep you updated as more is learned.