From The Field...

"Wow, where did the days go??  This mouth just flew right by!!

Permission Granted...

"You have permission to fail;

 you do not have permission... not to try."

From The Field...

"I'm planning to come out for the 15-K walk for the March of Dimes on Saturday.  Can you tell me where the closest place to park is...."


( H-m-m...?!)

The 99%.....

Balanced lending...

Here we go again! New millennium, but seems some things never change. Have noted a number of articles and "Letters to ... " recently arguing over risk-based lending (RBL) at credit unions.Thought we all  understood by now, that RBL is an empirically accurate and statistically sound way to eliminate subsidies and make lending fair at credit unions. After all this time, you'd think that credit union folks could calmly and reasonably analyze the merits of RBL without all the unproductive name calling and emotionalism. Some people just don't get it - never will!


Many, many credit unions have successfully implemented risk-based lending to the benefit of each and every member. More and more members are calling out and demanding increased risk-based lending by credit unions. Never has one concept been so uniformly and enthusiastically accepted by the masses. RBL is the top requested service on every member survey - right?.


One CEO told me that RBL was an easy sale to the Board after one Board member got back from an RBL seminar cruise. Evidently, in the bar, the Board member was chastised by an RBL advocate with the arguments: "You mean you charge the same loan rate to an admiral as you do to an E-4? You mean your school superintendent pays the same rate as the first year teacher?  The blue collars get the same deal?! Do your maid and gardener get the same rate you do?  That's not fair! You've got to start running that credit union like a business these days!"  It's an especially easy sale, when you lace the poison with a few high heat words like unfairness, subsidy, unprofitable, freeloading - free riders. Fairness, of course, is something every credit union person supports. Every effort should be made to assure fairness is a fundamental, core value of the credit union philosophy.


Evidently for the first seventy or eighty years of the credit union movement, boards and members didn't care much about fairness in lending. Unfairness existed in all credit unions since none used risk-based lending....

From The Field....

"Speaking of delinquencies, they are a litter higher..."


(Cat's out of the bag....!)

Pearls...

"Live life relentlessly!"

 - Jean Blaine

(She has and does! .... that's why I have always admired her so greatly !)

NCUA-Risk Focused Exams....

"NCUA Risk-Focused Examinations"

This type of examination centers on seven risk areas and the Board and management's ability to identify, monitor, and control these risks.


Here's the CU Movement's Latest Aggregate Risk Ratings:

             Rating                         Category

          LOW RISK                            Credit Risk - earnings and capital.

          LOW RISK                            Interest Rate Risk - market rate volatility.

          LOW RISK                            Liquidity Risk - funding potential obligations. 

          LOW RISK                            Transaction Risk - operational missteps.

          LOW RISK                            Compliance Risk - abiding by the law.

          LOW RISK                            Strategic Risk - adapting to change.

          LOW RISK                            Reputation Risk - public confidence.

The credit union movement as a whole is clearly on very, very solid ground in all these risk categories despite taking the full brunt of the worst economic recession in this Country in over 75 years. 

Take a bow and congratulations to all the highly effective Boards and Credit Union staff who have made sure credit unions remained strong.

But there is one other risk category of significant concern and worth monitoring....

      

Congress Begins To Speak Out...

 
"Sometimes it takes awhile for the truth to catch up with a lie...."

HR-3461 is a bill ("The Examination Fairness and Reform Act") introduced to address the nationwide concern over arbitrary and capricious regulatory exams.  Both CUNA and NAFCU testified in support of the bill at the recent hearing.

Before the House Financial Services Committee on HR-3461 (2/1/2012):  






Guess who just became the regulatory "poster child" for the reason this legislation is necessary?  Aren't you glad that credit unions are to be so publicly featured in this way?


Guess who else was watching...

Tough Love ...

Dear NCUA,

I wrote to you back on March 2, 2011 and June 29, 2011 to express my concern in connection with a series of mishaps with which you had been involved.

As a loyal, long-term supporter of NCUA; I was concerned that these lapses in judgment and in practices were creating a growing credibility gap in Congress and among the general public over the reputation and reliability of all of us committed to the credit union cause.

Well, since that time .... well, what can I say? Embarrassing Inspector General reports, "free loan" and "gift" solicitations, a "gamblers' laundry" at one credit union, the "Croatian mafia" at another, a new "material weakness" in your financial statements, no "exit strategy" on conversions, "your guess is as good as mine" Corporate loss accounting, "excuse-onomic" modeling, a GAO "can't find the numbers" audit, and now your tremendous snafu in North Carolina....

Can you please give some reassurances?

Sincerely,
Long-Time Supporter

Mutual Respect ....

"Well most certainly the Agency has a basic level of respect for state-chartered credit unions and state law...."


It would appear the Agency's definition of respect and cooperation is much the same level of courtesy as maintained between dogs and fire hydrants...

Attending The GAC.....

Are you off to the CUNA Government Affairs Conference this week?

Remember it's not held in Kansas...!!

Be sure to take the tours....

(Flash!! Sorry, this tour has been cancelled...)

And visit all the important sites...

The Fed!

The Capitol!

The Supreme Court!

The White House!

And, of course, everyone's favorite....

No Clue.....

The ability to continually miss what is painfully obvious...

Puppy Love....

Q:  What's the difference between a puppy and an NCUA "Problem" Case Officer?

Haiku For You...

Light Rain

Irresistible

Moonlight! Night light rain to whet

The edge of desire.

Covering Up Fraud?

The problems just keep surfacing from the April 2010 collapse and conservatorship of St. Paul Croatian Federal Credit Union, which created an $175 million NCUSIF loss - the largest (non-Corporate!) loss in NCUA history.


Management fraud is the latest problem. No, not fraud by St. Croatian's old management, who were clearly guilty and have 'fessed up!  It's the new management - the NCUA - which is accused, by a church no less, of acting inappropriately (imagine that!)


Seems Holy Love Ministry Church claims two things: 1) the Church (which is out $1.5 million or so) was prohibited from legally withdrawing funds prior to the conservatorship by an NCUA officer and 2) NCUA officers had instructed CU staff to make calls to credit union members to help them restructure existing accounts to maximize deposit insurance coverage to avoid potential loss.

Probably just some normal whining, sour grapes - right? Apparently not, since according to the Church's lawyer (see CUTimes - 2/26/2012) the delayed withdrawal and calls to maximize coverage are well-documented in the administrative record of the conservatorship.  If the NCUA did help manipulate accounts in advance, three other questions immediately arise: 1) Did NCUA call every "eligible" member over the $250K limit? ( The Church apparently thinks not.); 2) Is this the same procedure NCUA uses in all conservatorships? (Or is "standard practice" something a bit more arbitrary and capricious.); and 3) If NCUA is manipulating accounts at conserved CUs to avoid member losses, who then is absorbing those losses? (Think real closely on that one and it'll come to you - in more ways than one!)

From The Field...

"Per the prior memo, this is to confirm that we will be blocking steaming video on both Thursday and Friday..."


(Shucks!  Guess I'll have to watch the Tournament then....)

From The Field....

"During last year's ACC Basketball Tournament, we saw a spike in bandwidth usage to the point that employees were reporting latency issues in response times. When we disabled streaming video, we noticed an immediate improvement...."


"When I was younger", we would never, ever have considered doing such a thing! 


(We just smuggled in a portable TV.  'Course that was a few years before Al Gore invented the Internet....) 

White Teeth, Black Eye?

Any chance we could go ahead and quit while we're behind on this?
                                 .... pretty silly idea, girlfriend.


CU marketeers are still having a field day (just check the blogs!) with the marketing ill-logic of this $2 million+ expenditure.
  
Here are a couple of their points:

• Me Too! - Ms. Orman teamed with the FDIC for an identical campaign in 2008.  Nothing angers a marketeer more than the absence of originality;  they also tend to prefer fresh over stale!
• Mixed Message! - The "Just like FDIC" theme is a fundamental mistake, an admission of "brand weakness".  Never heard the "Pepsi just like Coke", "Ford just like Chevy", "Bud just like Miller" ads have you?  Never will.  Implication is that NCUA is just a cheap, "knock-off" of FDIC.
• Messenger - When the messenger creates more discussion than the message you've missed the mark.  And, there are always unknown risks with aligning (especially a Federal government agency) with any celebrity.... think Tiger Woods.  Or maybe Charlie Sheen.... or a pre-paid card insured by the FDIC!
•  Monopoly Marketing - Highly unclear why a monopoly federal deposit insurer spends scarce dollars to self-promote. What's the other choice?

For sure Ms. Orman is missing her greatest opportunity as a potential spokesperson for the American Dental Association!  It takes a lot of "finance" to get a smile like that!  And, those teeth are a whole lot more impressive than that jacket....


Let's hope those bright whites don't continue to give us a red face and black eye for much longer.....

Haiku For You.....

Change Of Season

There are leafless times

Many questions few answers

Truth to bring new life

- by Wesley K. Jones

Sacred Trust.....

"Off With Her Head!"

"...When the North Carolina regulator--without ever discussing it with us--gave permission to SECU to post its CAMEL rating, it violated our policies and it really violated one of the sacred trusts of the confidentiality rule that CAMEL scores for a variety of reasons should not be released.  Once that trust was violated and the regulator gave permission to violate our reg, we had no confidence anymore in the relationship with that regulator."

                                   - Chairman Debbie Matz

                      NCUA/CFPB Town Hall Meeting

                               February 8, 2012

Oh, really....

Still On The Bridge.....In Safe Hands?

"Our actions, taken together, saved you hundreds of millions of dollars.  Yes, you heard me correctly.  NCUA's actions have saved you hundreds of millions of dollars in additional insurance premiums."

              Chairman Debbie Matz                 

              Remarks to the CUNA

              Governmental Affairs Conference

              February 28, 2011

H-m-m...?  Maybe so, but what about the $25 billion that wasn't "saved"....

From The Field

"We had to remove the ATM, due to an exuberant rent increase of nearly 400%..."

(...also pretty absorbent financially!)

It's The Gospel....

Want to guess what the music-on-hold is at one of our local, faith-based credit unions?

You got it!... "Rock of Ages" and "The Old Rugged Cross".

Just hope they don't "hymn and haw" with their loan decisions...

GIGO......

When exam results are "pre-fabricated", in advance of the review process, one ends up with a "GIGO-low" ** report.







"These are the conclusions upon which our facts were based......"




** Garbage-in, garbage-out !