NCUA Operating Fees to Increase About $16.4% in 2024

Agency board Chairman Todd Harper outlines increases in letter to federal credit unions

The operating fees that federal credit unions pay to the National Credit Union Administration will increase about 16.4% this year, agency board Chairman Todd Harper wrote last week.

“The increase in the 2024 operating fee results from budgetary growth at the NCUA and the lack of a 2024 operating fee credit for unspent fees collected in past years,” Harper wrote, in a letter to federal credit unions.

Because of the COVID-19 pandemic, the NCUA conducted much of its examination work remotely, so the agency had money remaining in its travel budget during the last couple of years. As a result, federal credit unions received a credit that decreased their fees. This year, Harper wrote, the agency does not have money left over from previous budgets.

In his letter, Harper said that the operating fee is based on the NCUA’s operating and capital budgets, which grew about 7% between 2023 and 2024.

For the first time this year, federal credit unions with assets of $2 million or less will not be charged an operating fee. In the past, the threshold for an exemption was $1 million, but the agency board increased it last year.

“Since the last time the exemption threshold was adjusted, total assets have approximately doubled across federal credit unions,” Harper wrote. “The operating fee methodology was adjusted to keep pace with this growth and provide additional relief to the smallest federal credit unions.”

Credit union trade groups have complained about the budget increases, contending that each dollar spent on funding the agency is one dollar less that credit unions have to help their members.

“During the past decade, NCUA’s budget has increased by more than 47%, with the 2024 proposed operating budget being $126 million higher than the NCUA’s approved budget in 2014,” Virginia Credit Union League President/CEO Carrie Hun wrote, in a November letter to the agency board. “VACUL urges the NCUA Board reconsider its approach.” Hunt soon will become America’s Credit Unions’ chief advocacy officer.

Harper said that the agency’s Overhead Transfer Rate has decreased to 61.7%, a change of 70 basis point compared to 2023. He said that each year, the NCUA uses the OTR to determine how much of the agency’s operating budget is funded by the agency’s Share Insurance Fund. Generally, if the OTR decreases, the operating fee increases. The NCUA currently is soliciting public comment on the methodology it uses to calculate the OTR.

In March, the NCUA will send federal credit unions an invoice providing exact details of how much they owe the agency. Credit unions must pay their operating fee by April 18.