By Sarah Snell Cooke, Principal, Cooke Consulting Solutions

The NCUA published for public comment revisions to the methodology in calculating the Overhead Transfer rate. For the less wonky among us, the OTR is the calculation used to determine how much state-chartered credit unions pay into the NCUSIF to cover NCUA’s insurance-related expenses for examining them.

The NCUA is attempting to simplify the math and clarify its methodology for this arcane calculation. The OTR controversy is nearly as regular as defending the tax exemption, except this issue divides credit unions. The more the state charters pay into the NCUSIF, the fewer funds federal charters have to fork over. Comments on the OTR methodology must be received by Aug. 29, so make your voice heard!

Learn more about how to submit comments on the OTR by clicking here.

But for Vic Pantea, manager of marketplace alliances for CU*Answers, it calls into the question the very value of the NCUSIF. He pointed to all the uninsured funds savers have in money market funds (more than $3 trillion dollars as of March 2016, according to the SEC). Pantea also asserted, “Millennials don’t have the same faith in government backing.”

His suggestion is to blow the entire federal deposit insurance system up, and start over with a new vision for private deposit insurance. And, it should be risk based.

“As an industry, we failed ourselves as much as WesCorp or any of the others. We didn’t question, ‘Is this what we need anymore?’” Pantea stated. “It’s an old tool that hasn’t been analyzed or looked at in a long time, and we have an agency that’s living off of it.”

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Along the same lines of fiscal responsibility for member funds, Pantea argued, “Why are we still doing exams the same way we were in 1975?!”

The NCUA staff just so happened to present an update on the Enterprise Solutions Modernization project, which was touted as saving time and resources for both the agency and the credit unions during the same meeting. While the modernization of systems is much needed, Pantea pointed out that the budget numbers for the ESM were also shared; apparently, there’s about $13 million left in the budget for the ESM. Now guess where all the RFPs will come in at, Pantea pondered with tongue firmly planted in cheek.

“We should all keep changing as much as we can and be open to the best ways to do things,” he concluded.