Dear Board of Directors and Chief Executive Officer:
The 2018 Operating Fee Schedule for your credit union is enclosed. The enclosed chart will help you calculate the exact dollar amount of your credit union’s Operating Fee. The chart also references a web link to NCUA’s online calculator at (opens new window). The Operating Fee exemption continues to apply for federal credit unions with assets of less than $1 million. As a result, these smallest federal credit unions will not be charged any Operating Fee.
If your credit union owes any Operating Fee, it will be due by Tuesday, April 17, 2018, as described immediately below. The rest of this letter provides additional insight on the calculation method.
When will NCUA bill credit unions for the 2018 Operating Fee?
In March 2018, Federal credit unions with assets greater than $1 million will receive an invoice for their 2018 Operating Fee.
At the same time, all federally insured credit unions will receive notice of any amount needed to adjust their Share Insurance Fund capitalization deposit to 1 percent of insured shares, as required by the Federal Credit Union Act.
- Your Operating Fee will be based on assets reported as of December 31, 2017.
- Your capitalization deposit may adjust up or down, based on the insured shares reported as of December 31, 2017.
NCUA will combine your Operating Fee and capitalization deposit adjustment into a single invoice for which payment will be due April 17, 2018.
How do I make the payment to NCUA?
For federal credit unions signed up to pay through Pay.gov, no further action is required. Payment will occur automatically on the due date.
Other federal credit unions will need to send payment by Tuesday, April 17, 2018, according to the instructions included with the invoice.
How is the Operating Fee calculated?
The two major factors influencing the 2018 Operating Fee rate change are the Overhead Transfer Rate and the growth of federal credit union assets.
NCUA uses the Overhead Transfer Rate each year to determine how much of the agency’s Operating Budget is funded by the National Credit Union Share Insurance Fund. The Overhead Transfer Rate is calculated from the annual allocation of NCUA resources used for insurance-related functions. Generally, if the Overhead Transfer Rate increases, the Operating Fee collected from federal credit unions decreases. Conversely, if the Overhead Transfer Rate decreases, the Operating Fee collected from federal credit unions increases.
For 2018, the Overhead Transfer Rate decreased from 67.7 percent to 61.5 percent, which raised the Operating Fee. To preserve the relationship of the Operating Fee Scale to federal credit unions within each asset tier, the asset range for each tier is adjusted by the projected growth of federal credit union assets. You will see the new asset ranges to the right of the adjusted fee rates on the enclosed chart.
If you have any questions about this letter, please contact NCUA’s Office of the Chief Financial Officer at email@example.com.
J. Mark McWatters