Saturday, October 25, 2014

Mr. McWatters Tries To Explain To The Chair That She Is Confusing Cause And Effect....


Not too difficult to understand why NCUA CFO Mary Ann Woodson, a 35 year veteran, is hanging it up and calling it quits after listening to the little "dialogue " last week between Chair Matz and Director McWatters at the NCUA Board Meeting. 

At the meeting, during CFO Woodson's financial report, McWatters correctly pointed out that most NCUSIF losses were coming from small credit unions.  A true statement to which Chair Matz "took exception".  A veteran like Ms. Woodson understands that it is only a matter of time before another, similar "dialogue" will reoccur; and that the Chair will eventually turn to her and ask for her opinion as CFO on the disagreement.
 
Ms. Woodson is a highly regarded leader, ethical and principled - prone to tell the truth!  And, it is well known within the Agency, that "speaking truth to power" under the current regime has a tendency to be fatal.  Yes, Ms. Woodson a very good time to retire....Bon Voyage!!


HERE'S ANOTHER "REPRINT" TO VALIDATE THAT MR. MCWATTERS "GOT IT RIGHT" ... AND THAT THE CHAIR STILL ISN'T LETTING THE FACTS GET IN HER WAY:



Those Large Risky CUs !!!
"With more than $1 trillion in industry assets, deposits at federally-insured credit unions are protected by a fund of just over $11 billion.  However, four credit unions each has assets of $10 billion or more.  So, each of those four has assets nearly the size of, or greater than, those of the Share Insurance Fund."

 - NCUA Chair Debbie Matz, 9/18/2013

Oh Really....

Friday, October 24, 2014

Mr. McWatters Has Arrived: A Breath Of Fresh Air (At Last!) At NCUA?


Draw your own Conclusion!
According to the CUJournal (10-22-2014), Chair Matz and Mark McWatters got into a little "tiff" at the recent NCUA Board meeting over the issue of how to reduce the fraud losses paid by the NCUSIF.  

Chair Matz continues to harp (incorrectly!) on "the threat" posed by larger credit unions, while Mr. McWatters suggests that NCUA should focus on the facts, which clearly indicate that most fraud losses arise in smaller credit unions.  Facts and actual data have, of late, been considered as little more that an "inconvenience" by the current NCUA leadership, - especially when the facts conflict with the narrow-minded biases of NCUA's entrenched "ridiculocracy". 

Here's a "reprint" from earlier this year which shows that  Mr. McWatters is right....  LARGER CUs ARE NOT THE PROBLEM AT NCUA:



ACCORDING TO:

The NCUA Report
September 2013

"The [2008 financial] crisis showed that credit unions and regulators must be forward-looking and identify emerging risks sooner.  For example, credit unions cannot simply reach for higher yields without considering long-term consequences."  

"This is why NCUA issued a rule requiring credit unions to plan for interest rate risk and why we proposed allowing qualified credit unions to use derivatives to manage that risk.  We also created the Office of National Examinations and Supervision [the "ONES"] to focus on credit unions that pose the largest risks to the Share Insurance Fund."


WELL, THE RESULTS ARE IN BOYS AND GIRLS:


EVERY ONE OF THE 25 LARGEST CREDIT UNIONS IS WELL-CAPITALIZED!!
(As Naked Capitalism blogger Yves Smith would say: "Quelle surprise!")

NCUA's focus on credit unions with assets greater than $1 billion as "risky" has always flown in the face of the facts and NCUA's own actual history of losses from failing credit unions.  

Again for the record, that credit unions in this category pose "the largest risk" to the NCUSIF just because of their size is "robustly" delusional and falls victim to the classic analytical mistake of confusing size with risk. 

So let's do the geography, political risk analogy one more time.....

 

Based upon NCUA"s robust...

"SIZE = RISK" Theory,
The U.S. invaded the wrong country in 2001. After all Afghanistan is a country with a land area of only 250,000 square miles.

Clearly if "SIZE = RISK" then the U.S. should have invaded...

Thursday, October 23, 2014

The Future Of Your Credit Union: Inside The Box Thinking?


FROM THE OCTOBER 2014 ISSUE OF
THE NCUA REPORT

Found the following to be weird enough to make this blog! 
(And that's pretty weird - right!?)

(Oct. NCUA Report pg. 7)  "While credit unions face the challenge of discerning what is lurking around the next corner, NCUA also faces similar challenges.  How will changes in the financial marketplace alter the regulatory tools and skill sets required to fulfill our statutory mandate to protect the system?"

"The future is indeed like that box of chocolates.  We don't know what we are going to get.  But each of us must realize that disruption is an inevitable wildcard by testing every hypothesis relating to accepted financial norms.  It's time to start asking, "What would Forrest Gump do?"

NCUA's best advice on the future for CU's is:

IT'S TIME TO START ASKING, "WHAT WOULD FORREST GUMP DO?" ???

GUMP ?
Not really sure where to go with that advice, are you?  Should we ask Forrest Gump what to do about RBC or has NCUA already asked?

Actually, instead of relying on Forrest Gump;  believe the NCUA should internalize what Forrest's mother told him...

Wednesday, October 22, 2014

RBC: Waiting On "The Second Coming"... A Gnawing Concern?


SOME REALLY GOOD NEWS! 


A "Robust"- Based Capitol?
 THE AGENCY HAS POSTED AN UPDATE ON YOU TUBE, CONCERNING HOW THE WORK IS COMING ALONG ON THE REVISIONS TO THE RISK-BASED CAPITAL (RBC) RULE!

YOU CAN LOCATE IT RIGHT AFTER THE ECONOMIC FORECAST VIDEO !! SAME VEIN, SAME LINE OF THOUGHT, SAME IMPORT!!

HERE TAKE A LOOK...

Tuesday, October 21, 2014

RBC: "The Second Coming"... Traveling At The Speed Of Slight.


KNOW YOU ARE ALL FAMILIAR WITH THIS FAMOUS QUOTE:

Brained-hair !!!

"Insanity:  Doing the same thing over and over again and expecting different results."

- Albert Einstein



So, consider this:  Who is...

Monday, October 20, 2014

Awaiting The "Second Coming" Of RBC....


TICK, TICK,....
Q: "CAN YOU PLEASE TELL ME WHY IT IS TAKING NCUA SO LONG TO REISSUE THE RISK-BASED CAPITAL (RBC) RULE?  WHAT'S THE PROBLEM?"


A: NOT SURE ANYONE KNOWS, BUT I CAN SHOW YOU THE PROBLEM THEY NOW HAVE...

Sunday, October 19, 2014

NCUA Economic Forecasts: Worth Their Weight In Robust...


AS NCUA HAS PREDICTED INTEREST RATES CONTINUE TO SOAR:

Up they go !!!
The 5-yr. T-Bill:

Jan. 15, 2014   1.62%

Feb. 15, 2014   1.53%
Mar. 15, 2014   1.57%
Apr. 15, 2014   1.62%
May 15, 2014   1.53%
June 15, 2014   1.70%
July 15, 2014   1.69%
Aug. 15, 2014   1.54%
Sep. 15, 2014   1.79%

Oct. 15, 2014   1.31%



As Gregg Stockdale has so appropriately pointed out about the NCUA economic videos... ("archived foolishness")... "NCUA just keeps crying wolf"!  Actually,...

Saturday, October 18, 2014

Friday, October 17, 2014

Risk-Based Capital: The Second Comment Period...


Roger that!

"IF STUPIDITY GOT US INTO THIS MESS, THEN WHY CAN'T IT GET US OUT?"

- Will Rogers

("They" are working on it!!)

Thursday, October 16, 2014

Cheap Tricks…. IMCR


The cause for the delay???
As we await the "second coming" of NCUA's risked-based capital rule (RBC), would like to revisit over the next few weeks the most egregious example of Agency over-reach and underhandedness in the current RBC proposal...

 "INDIVIDUAL MINIMUM CAPITAL REQUIREMENTS" (IMCR).

You can be sure that the NCUA will not willingly delete this unnecessary, unfair, and dangerously undemocratic provision without a campaign of active, outrage by all credit union members. If credit unions needed 2,200+ comment letters last time to attract Congressional interest and publicly slap NCUA into reasonableness...

WE WILL NEED TO HAVE 200,000+ COMMENT LETTERS THIS GO ROUND.  
HOPE "YOU'RE UP TO IT".

Here's the refresher...

Caught in the act .… again?
If you've ever read a cheap, trashy dime store (guess that's a "dollar store" these days with inflation!) mystery novel, then you know the easiest way to find out "whodunit?" is to start at the back of the book.  

In the final, poorly plotted chapter, the evil-doer is always identified (it was the butler!) and how the murderous crime was committed (with the candlestick in the billiards room!is also revealed.  These run-of-the-mill authors invariably save the worst for last.  The reader hoped for a new, imaginative story line, more deeply drawn characters, and more finely nuanced emotion; but closes the cover - played for a fool once again.


We're not even good
at "sneaky"!
NCUA's recent risk-based capital proposal is much like those trashy mystery novels, the worst crime is revealed in the last chapter of the rule (pages 195-198 of the 198 page printed draft.) Slipped in on the sly in the most common of underhanded fashion.  Hidden at the back with some assurance that you'd "miss it".  Crass trash, something of a signature of the genre.

The entirely new authority which NCUA awards itself ( for its' stellar, recent record of regulatory performance?) is designated as…