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Berger urges NCUA to prioritize "fairness and accuracy" in OTR methodology
NAFCU President and CEO Dan Berger asked the NCUA to support an overhead transfer rate (OTR) methodology that is based on fairness and accuracy in a letter Tuesday, two days before an open meeting where the agency board is expected to adopt a new methodology.
He additionally asked that the board avoid any changes to the OTR that "would sacrifice quantifiable data inputs in the name of simplicity."
The NCUA Board issued a request for comment on its OTR methodology recommendations in June. The NCUA has proposed revising the methodology to three steps; the agency currently uses an eight-step calculation. The proposed methodology also eliminates the examination time survey. If the proposed methodology had been used in setting the 2017 OTR, the rate would have been set at 60 percent, compared with the current 67.7 percent.
In its August comment letter, NAFCU urged the NCUA to retain its current OTR methodology, calling it an "objective formula-based model" that "prioritizes fairness, accuracy, and equity."
In Tuesday's letter to NCUA Chairman J. Mark McWatters, Berger wrote that the "current OTR methodology has a long history and has been vetted by third-parties. It is worth improving instead of migrating to a new largely subjective system," he added.
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