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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
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The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
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Balance Computation Methods

96-0404 / April 1996

Balance Computation Methods

Subject

Operations

Historic Status

Non-historic

April 8, 1996

William G. Berg
Financial Management Services Specialist
Florida Credit Union League, Inc.
P.O. Box 3108
Tallahassee, FL 32315-3108

Re: Balance Computation Methods (Your Letter of March 27, 1996)

Dear Mr. Berg:

You requested an opinion regarding the ability of a credit union, which pays dividends using the average daily balance method, to use the daily balance method to calculate a minimum balance requirement to avoid a monthly fee on the same account. The NCUA Truth in Savings Official Staff Commentary permits this practice:

1. Methods and periods. Credit unions may use different methods or periods to calculate minimum balances for purposes of imposing a fee (the daily balance method for a calendar month, for example) and accruing dividends (the average daily balance for a statement period, for example). Each method and corresponding period must be disclosed. 12 C.F.R. Part 707, App. C, Comment 707.4(b)(3)(ii)-1, Balance computation method.

Sincerely,

Richard S. Schulman
Associate General Counsel

GC/MSC:sg
SSIC 3253
96-0404
cc: H. Allen Carver

Last modified on

11/14/24