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Board Action Bulletin

Risk-Based Capital Rule Delayed; Normal Operating Level Stays at 1.38 Percent

ALEXANDRIA, Va. (Dec. 12, 2019) – The National Credit Union Administration Board held its eleventh open meeting of 2019 at the agency’s headquarters today and approved two items:

• Operating, capital, and National Credit Union Share Insurance Fund budgets for 2020 and 2021.
• A two-year delay for the effective date of the agency’s risk-based capital rule.

The Board also received a staff briefing on the National Credit Union Share Insurance Fund’s normal operating level.

Agency Budgets Set for 2020, 2021

Board members approved, by a 2 to 1 vote, the agency’s budgets for 2020 and 2021 (opens new window). The combined operating, capital, and Share Insurance Fund administrative budgets for 2020 will be $347.4 million. The combined budgets for 2021 will be $360.1 million.

Budget	2020	2021
Operating budget	$315.9 million	$328 million
Capital budget	$25.1 million	$25.2 million
Share Insurance Fund budget	$6.5 million	$6.9 million

Operating budgets for both years assume 1,185 full-time equivalent positions.

Overhead Transfer Rate Set at 61.3 Percent; Operating Fee Rises 1.13 Percent

The 2020 overhead transfer rate will be 61.3 percent, and the operating fee will increase by an average of 1.13 percent for natural-person federal credit unions with assets of more than $1 million.

Detailed information on the overhead transfer rate and operating fee is available in the 2020–2021 Budget Justification (opens new window).

Federal credit unions will fund 70 percent of the NCUA’s 2020 operating budget, and federally insured, state-chartered credit unions will fund 30 percent.

The NCUA will charge federal credit unions the operating fee in March 2020, and payments will be due in April 2020.

The NCUA uses the operating fee to pay the agency’s costs of regulating federal credit unions. The overhead transfer rate is a transfer from the Share Insurance Fund to cover insurance-related expenses paid by both federal credit unions and federally insured, state-chartered credit unions.

Risk-Based Capital Implementation Delayed to 2022

The NCUA’s risk-based capital rule will become effective on Jan. 1, 2022, under a final rule (opens new window) approved by a 2 to 1 vote.

Normal Operating Level Remains at 1.38 Percent

The normal operating level (opens new window) of the National Credit Union Share Insurance Fund will remain at 1.38 percent.

The normal operating level is the equity level set by the NCUA Board based on an economic stress analysis. The Federal Credit Union Act allows the NCUA Board to set the normal operating level between 1.20 percent and 1.50 percent. Funds available beyond the established normal operating level are distributed to credit unions when all of the statutory criteria are met.

The agency reviews the normal operating level annually.

The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.