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NCUA Board Approves Proposal on MDI Preservation Program

June 2023
NCUA Board Approves Proposal on MDI Preservation Program

Board Action Bulletin

Requests Comments on Operating Fee Schedule Methodology

ALEXANDRIA, Va. (June 22, 2023) – The National Credit Union Administration Board held its sixth open meeting of 2023 and approved a proposal about the agency’s minority depository institution preservation program and a notice and request for comment on the NCUA operating fee schedule methodology. The NCUA Board also was briefed on efforts to modernize the chartering process for federal credit unions.

Proposed Changes to MDI Preservation Program IRPS Approved by Board

The NCUA Board unanimously approved proposed changes to the interpretive ruling and policy statement on the agency’s Minority Depository Institution Preservation Program. The proposal would amend Interpretive Ruling and Policy Statement 13-1, approved on June 18, 2015, to reflect the transfer of the MDI preservation program administration from the agency’s Office of Minority and Women Inclusion to its Office of Credit Union Resources and Expansion, update the program’s features, and clarify the requirements for a credit union to receive and maintain an MDI designation.

“For millions of Americans, the work of MDI credit unions means under-resourced communities have access to safe, fair, and affordable financial products and services,” NCUA Chairman Todd M. Harper said. “The proposed changes to our MDI preservation policy statement would enable hundreds of MDIs to continue meeting the needs of their members and communities. This, in turn, would help millions of Americans increase their financial security and opportunity.”

Proposed amendments to the interpretive ruling and policy statement also include incorporating recent program initiatives, providing examples of technical assistance an MDI may receive, establishing a new standard for MDIs to assess their designation periodically, and updating how the NCUA will review an MDI’s designation status, among other changes.

Comments on the proposal to amend the interpretive ruling and policy statement must be received no later than 60 days after its publication in the Federal Register.

NCUA Requests Stakeholder Comments on Operating Fee Schedule Methodology

The NCUA Board unanimously approved the issuance of a notice and request for comment about adjustments to the methodology the Office of the Chief Financial Officer uses to determine how it apportions operating fees charged to federal credit unions. The Board uses these operating fees to fund part of the NCUA’s annual budget.

In the notice and request for comment, the Board proposes to increase the threshold below which federal credit unions are exempt from paying an operating fee from $1 million to $2 million and establish a process to update the exemption threshold in future years based on the credit union system’s annual asset growth. The request for comment also seeks views about whether and how the Board should modify the current three-tier operating fee schedule.

“Raising the operating fee exemption threshold to $2 million and indexing that threshold for inflation will provide a measure of relief to these institutions, bring the threshold back into alignment with where it once was, and keep it there going forward,” Chairman Harper said. “I strongly encourage federal credit unions to share their views about whether to modify the rate structure of the operating fee methodology to make it less regressive. Given the industry’s changing dynamics, I’d also like to know what other changes stakeholders would like the Board to consider in future modifications of the operating fee methodology.”

Comments are due 60 days after the notice’s publication in the Federal Register.

Board Briefed on New Charter Modernization Efforts

The NCUA’s Office of Credit Union Resources and Expansion briefed the Board on the agency’s efforts to modernize the charter process. The briefing described the three phases of chartering and reviewed goals for the completion of each stage. Staff also discussed improvements the NCUA has made to its operations, including updates to the new chartering webpage and new templates and forms to help organizing groups.

As a result of these improvements, the time to review and approve a complete application has been reduced to approximately 130 days from start to finish. As such, the number of new charters increased from just one in 2020 to four each in 2021 and 2022.

“The NCUA is making meaningful improvements to its chartering process to bring new and more federal credit unions into the system,” Harper said. “In doing so, we are providing more consumers with greater access to safe, fair, and affordable services under the cooperative model.”

In addition, staff outlined NCUA’s new charter management system and the provisional charter program the agency is piloting. Information on starting a new federal credit union and the chartering process is available on the NCUA’s website.

Follow @TheNCUA on Twitter, and access Board Action Memorandums and NCUA rule changes at The NCUA also live streams, archives and posts videos of open Board meetings online.

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