ALEXANDRIA, Va. (11/9/12)--The 2013 budget, overhead transfer rate (OTR), operating fee scale and projected share insurance and corporate assessments are all on the agenda for the National Credit Union Administration's (NCUA) Nov. 15 open board meeting.
The NCUA's original 2012 budget was set at $236.9 million, but the agency in July reduced its projected 2012 budget by $2 million. The Credit Union National Association (CUNA) called this reduction a step in the right direction, and has encouraged the agency to make greater budget cuts.
Last year's OTR was set at 59.3%, and the agency reduced the 2012 operating fee rate for federal credit unions by .90% when compared to 2011's rate. The NCUA in 2012 charged operating fees of $0 for assets up to $500,000 and $100 for assets from $500,001 to $750,000. Operating fees were charged on a sliding scale for credit unions with assets greater than $750,000.
The agency did not charge a National Credit Union Share Insurance Fund (NCUSIF) premium in 2012.
CUNA Chief Economist Bill Hampel last month said the 2013 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment is likely to be in the range of 5 basis points (bp) to 10 bp. A 2013 TCCUSF assessment of no more than 5 bp "would be sufficient to responsibly make headway on paying down the fund, pending further information on what the ultimate losses will actually be," he said.
The NCUA assessed a 2012 TCCUSF charge of 9.5 bp, and that charge was expected to bring in $790.5 million in funds to help cover the costs of corporate credit union stabilization.
Credit unions have already paid $4.1 billion in TCCUSF assessments, and the NCUA recently reduced the projected cost of corporate credit union stabilization assessments to between $6 billion and $8.9 billion. This represents a $400 million reduction from the previous maximum cost of $9.3 billion.
With the new estimates, they will need to pay between $1.9 billion and $4.8 billion in additional assessments before the stabilization fund expires in 2021. Hampel in recent weeks projected a range of assessment possibilities for the agency and credit unions. (See Nov. 2 News Now story: NCUA reduces TCCUSF high estimate by $400M)
For more on the NCUA board meeting, use the resource link.