Couverture de NCUA's December Board Meeting

NCUA's December Board Meeting

NCUA's December Board Meeting

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 Board Approves NCUA 2024–2025 and Central Liquidity Facility BudgetsBoard Action BulletinRevises Operating Fee Schedule MethodologyALEXANDRIA, Va. (Dec. 14, 2023) – The National Credit Union Administration Board held its eleventh open meeting of 2023 and approved four items:The agency’s budget for 2024 and 2025.The Central Liquidity Facility budget for 2024.The issuance of a final notice on the Operating Fee Schedule Methodology.The issuance of a notice and request for comment on the existing Overhead Transfer Rate Methodology.Budget Approved for 2024 & 2025The NCUA Board unanimously approved the agency’s Operating, Capital, and National Credit Union Share Insurance Fund administrative budgets for 2024 and 2025(opens new window).“The recommended budget before us represents a consensus. It includes compromises by all of us at the table,” Chairman Todd M. Harper said. “Give and take is essential to any organization’s policymaking and budgeting process, and the budget before us reflects that principle in action. This funding plan provides sound financial stewardship and will allow the NCUA to execute its financial stability and consumer financial protection missions over the next two years.”Combined, the 2024 Operating, Capital, and Share Insurance Fund administrative budgets will be $385.7 million and 1,247 staff positions. This is $8.8 million less than in the staff draft budget. The combined budget for 2025 is $433.3 million, with 1,251 staff positions.Budget20242025Operating | $374.5 million | $418.4 millionCapital | $6.1 million | $10.0 millionShare Insurance Fund Administrative | $5.1 million | $4.9 millionGrand Total* | $385.7 million | $433.3 millionInformation on the NCUA’s budget can be found on the Budget and Supplementary Materials page on NCUA.gov.Central Liquidity Facility Budget ApprovedThe Board unanimously approved the 2024 Central Liquidity Facility Budget(opens new window) of $2,199,065.Said Chairman Harper, “In this current economic environment of heightened interest rates and liquidity risk for credit unions, including several with over $1 billion in assets, the role of the Central Liquidity Facility as a liquidity backstop has assumed even greater importance. The saying, “there’s strength in numbers,” is especially applicable to the CLF because the more members it has, the more effective it is as a liquidity facility.”The NCUA Board, in its capacity as the CLF Board, must approve the CLF’s budget. In prior years, the CLF’s expenditures were accounted for in the NCUA operating budget. This request for approval of the CLF budget reflects the recent NCUA Board decision to strengthen the independence of the CLF and separate its budget from the NCUA operating budget.The 2024 CLF budget justification is available on the NCUA website(opens new window). The document includes information on the spending categories, sources and uses of funds, and planned activities.Board Approves Final Notice on Operating Fee Schedule MethodologyThe NCUA Board unanimously approved the issuance of a final notice(opens new window) making the following revisions to the Operating Fee Schedule methodology:Increasing the fee exemption asset threshold below which federal credit unions are not required to pay the operating fee from $1 million to $2 million.Increasing the fee exemption asset threshold in future years by the aggregate growth rate for federal credit union assets.“Raising the operating fee exemption threshold to $2 million and indexing that threshold for inflation will provide a measure of relief to these institutions, bring the threshold back into alignment with where it once was, and keep it there going forward,” said Harper. “As I said when this rule was proposed, that’s a positive and welcome change for our smallest institutions.”At its June 2023 meeting, the NCUA Board unanimously approved the issuance of a notice and request for comment(opens new window) about adjustments to the methodology the NCUA uses to determine how it apportions operating fees charged to federal credit unions. The Board uses these operating fees to fund part of the NCUA’s annual budget. The proposal provided for a 60-day comment period that ended on September 5, 2023.Board Approves Request for Comment on Overhead Transfer Rate MethodologyThe NCUA Board unanimously approved the issuance of a notice and request for comment(opens new window) on the existing Overhead Transfer Rate (OTR) methodology. The Board is inviting comment on the NCUA’s methodology to determine the OTR. The request for comment clarifies the four principles for calculating the OTR and the various cost allocations associated with the calculation.Said Chairman Harper, “Calculating the OTR is complicated. It’s a classic Goldilocks-style dilemma. Adjust it too low, and federal credit unions must pay a greater portion of the agency’s budget. Calculate it too high, and funding the agency could fall ...
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