Saturday, August 27, 2016

Are You "Listening" ....?

Q:  Did the CU regulatory system fail in 2009?  (Think we all can answer that one!)

Q:  What precisely were the reasons the credit union regulatory system failed?

Q:  Why did the credit union regulatory system fail to anticipate the problems which arose?

Q:  Who was responsible for the failure of the credit union regulatory system?

Humpty Dumpty sat and sat and s...
Q:  Just how costly was that failure to credit unions?

Q:  Exactly what has been changed within the credit union regulatory system to prevent a reoccurrence?

Q:  Significant organizational, governance, and personnel changes do not appear to have been made.  Why wasn't a major overhaul of the credit union regulatory system implemented, given the massive extent of the failure?

Q:  Why should credit unions have faith that the very same regulatory system, the same leadership, and the same lack of foresight which failed so thoroughly in the past, will not produce the same results in the future? 

Hump Time!
(Dump Time?)

.... are you "listening"? 

( If so, then get off your "egg"!)  

Friday, August 26, 2016

Too Big For Their Breaches....

"Gimme Shelter..."
Despite the massive legal and legislative wranglings, over the last few years,
between retailers and credit card issuers, one major source of argument and friction remains unresolved. That issue, that source of ill-will and dispute, is the question of responsibility, accountability, and liability for losses associated with credit card "breaches".

A "breach" arises when individual consumer
"Dishonest hacktivity..."
credit card data is stolen from the computer systems of a merchant or card processor. Generally the breach occurs due to the dishonesty or lack of training of a retail employee, or from a flaw or lapse in the security and controls protecting the retailer's card processing systems.  

The mischief and financial losses which result from the misuse of stolen credit card data can be extremely costly to the retailer, card issuer and the consumer.
Kiss It Good-bye...!

Retail card breaches are not an infrequent occurrence as most credit union card issuers know. Most frustratingly, retailers and merchants have a well-established reputation for failure to acknowledge their card processing lapses.  Deny, stall, and delay are favorite tactics.  

In the meantime, the consumer feels threatened, uncertain, and betrayed, while the credit union bears the costs of notification, card replacement, and trying to help manage the outrage and frustration of the members who have been victimized.  

Had an example of the very high "reputation cost" of a breach to the credit union just last week.  Was on the receiving end of a complaint call from a highly infuriated, female credit union member of long-standing. Didn't even get the slightest opportunity to offer my explanation that "the CU didn't cause the breach" before:

"And further more..."
"I've been a member for over thirty years and have always counted on the CU to look after my money and protect my privacy. Heard you claim all these years that the CU is working in the best interests of the members. Well, this is the third replacement card I've gotten in the last two years!  What kind of slip-shod operation are you running down there ? How can any of us trust you if you can't keep up with your credit card numbers; when did you stop hiring honest employees?  Don't you think the members should hire some new blood that can run the place right?!??!"

Well, you get the picture (and she was  just "warming up"), but what made this situation particularly frustrating for me was ...

Thursday, August 25, 2016

Credit Unions: Finding Our Market Niche....

Q:  Is there a future for credit unions in this highly competitive financial marketplace?

A:  As someone recently suggested, what if credit unions focused our efforts solely on those consumers who are "overcharged" by the banking industry and those consumers who are "underserved" by the banking industry?

H-m-m-m.... Let's see now: 1) focus only on those underserved by the banks and 2) those overcharged by the banks. Why that would include....

Wednesday, August 24, 2016

Fine Whine...

The capital markets specialist was much like a fine French Beaujolais....

....young, dry, lightweight, 
a bit fruity.

(Not yet robust!)

Tuesday, August 23, 2016


Not sure how
I feel about this !

A true story which arose not from a credit union, but from a recent visit to the dentist office….  

The dentist injected several rounds of Novocaine in anticipation of a little ceramic repair work and then departed to give the anesthetic a few minutes to work its magic.  Upon returning he asked a question and made the blog….

He asked:  "Do you feel…

Sunday, August 21, 2016

Climate Change... The Latest Episode.

Reading the Wall Street Journal is usually pretty dry stuff, but every now and then...

The August 13/14 weekend edition had an opinion piece ("California's Cow Police") on "enteric fermentation" which is a concern, growing louder, in the debate over climate change and air quality in California.  The short word for enteric fermentation i"flatulence" (there are also several even shorter, oft used four letter descriptors). It seems that the California Air Resources Board has "quietly released" regulations to cut the state's greenhouse gas emissions to 1990 levels by 2020.

It wasn't me!

The principal obstacle to meeting these goals apparently is methane gas, which is described as "a short-lived climate pollutant" with "an out-sized impact on climate change in the short term". Methane is mostly produced by cows, but California dairy farmers are struggling with how to get the cows to agree to the politically mandated 40% reduction in methane levels. As the WSJ so appropriately notes: "Many California dairy farms have already been converted into nut farms, which are more economical amid the state's high regulatory costs". With current regulatory overreach, it is not too hard to imagine even more of California turning into "nut farms"...

But, the real concern is...

Saturday, August 20, 2016

It's Hard To Be Robustly Humble...

Economic Truth Decay!
John Maynard Keynes, the eminent British economist, said: "If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!" 

But according to a recent blurb in The Economist, humility is not a growing phenomena among economists, who have come to believe they are superior.  Jokes Deidre McCloskey, an economic historian: "An economist will tell you with all the confidence of a witch doctor that interest rates will rise 56 basis points next month or that dropping agricultural subsidies will increase Swiss national income by 14.8%."
Cock-eyed, "which doctors"?

Kind of reminded me of the remarkable and consistent record of unreliability achieved by our economic pontificators, our "robusterian witch doctors" over on Duke Street, Alexandria. A well-signaled malpractice in any other profession - even at the novice or amateur level.

Makes one think that in terms of economic foresight and quantitative analysis the NCUA is...  

Friday, August 19, 2016

The Sun Also Rises.....

Guidance: "DUCK!"

Was really thrilled and certainly grateful for the "guidance" recently provided to credit unions on hurricanes and floods by the folks over on Duke Street.  It had never occurred to me that the NCUA was a noted authority and a point of reference on the topic of disasters, but come to think of it... 

U.S. Economic Forecast??

Did know that they had hired a slew of economists (about $2 million bucks worth!) to help assist the Federal Reserve with national economic planning.  So, perhaps the natural extension of that logic was to add a staff weatherman and meteorologists to help the National Weather Bureau with its forecasts.  The reliability and precision of economic and weather forecasts are, after all, "robustly correlated"

Diaster Central Command Post
When you establish a clear record of competence and expertise; it's only natural to want to share those gifts with others.  And, NCUA has most definitely established quite a reputation for competence and expertise over the last decade...

Here's the NCUA's new official disaster guidance:

  • Implement pre-disaster actions to ensure a constant state of readiness.
  • Communicate disaster preparedness and response efforts before, during, and after an emergency.
  • Utilize a cross-section of people to develop, test, and implement disaster preparedness and response plans.
  • Ensure back-ups are available.
  • Treat disaster preparedness and response plans as living documents.


Thursday, August 18, 2016


... means you never have
 to say (or admit!)
you're "sorry".

It is increasingly obvious that senior level failures at the Agency are squelched, white-washed, veiled and varnished - never to be acknowledged, all without consequence.

Which is why the NCUA is one of the few places in all the world, where you can meet....