"The NCUA unveiled a voluntary prepaid assessments proposal May 19."
"Participation by any credit union would essentially involve granting the NCUA an interest free loan for a few years."
"The voluntary nature of the program could also pose a "free rider" issue, where all credit unions could benefit from reductions in assessments in the short term at the expense of the subset of credit unions that voluntarily participate..."
Questions From Your Board:
Q: You are proposing an interest free loan to NCUA? A: Yes!
Q: Why not an interest free loan to our struggling member-owners? A: Well, ....
Q: Is a voluntary interest free loan in keeping with our fiduciary responsibility? A: Well ....
Questions From Your CPA:
Q: Are you sure this is a "pre-paid expense"? A: NCUA says so!
Q: Doesn't it look like a troubled debt restructuring(TDR): "Condition where a lender grants a concession to a borrower in financial difficulty"? A: Well, ....
Questions From Your Members:
Q: What the #!X&**! ......??!!! A: Well, ....
Questions From A Sense Of Outrage:
Q: Just who is the real "free rider" in all this? A: Well ....
Henry Wirz is one of the CU movement's best thinkers - and commentators. Mr. Wirz is, also, remarkably credible since, over the years, he has served in numerous CU volunteer leadership positions and guides a highly successful CU in Sacramento, Ca.
Henry recently opined on "alternative capital" in the always incisive CU Times ("Capital Plan is A Bust" - 5/11/11). While Henry gets much of it right, he is a bit of a "historical revisionista" on the origins of CU cooperative capital. I ascribe this mainly to Henry's youthful inexperience; he's only been around for 25/30 years, a mere babe in the woods, still somewhat damp behind the auricular orifices.... looks like he's even begun to dye his hair gray to add "presence". Youthful optimism and exuberance - not really a fault - but for those of us who were actually there "at the beginning"....
Vensure Federal Credit Union has been making a lot of noise of late and has created quite a little "racket" over at the NCUA! According to the inimitable CU Journal (5-11-11), the recent conservatorship vote was necessary because, as Mike Fryzel (quoted from the Board minutes) stated: "We are going to be taking action on it at the last minute in order to make sure that we are not embarrassed further."
Mr. Fryzel went on to say, "now, at this late date, we sit attempting to take action before the Justice Department moves in and embarrasses us even further."
Well, it's at least encouraging to know that "the ole Redhead" is red-faced! Perhaps Mr. Fryzel will help rebuke the usual NCUA "apologists" who will surely come forward with: "Look, we're a small Agency and accidents do happen. After all, everyone trips up occasionally; and anyone can have an off-decade from time to time."
Alexandria does not appear to appreciate that the ("we, we, we") embarrassment tinge and taint fall a bit further afield, than just upon the self-reflective regulatocracy poodled-up on the corner of Duke Street.... White teeth , Black eye, Red face.... well at least they're always colorful!
Another bad deal .... "Won't happen again" .... wanna bet?