"Sliding" Toward Incredibility...

As you know NCUA announced last week, with great fanfarce and a fascinating array of four-colored slides, the creation of the "new" Office of National Examinations and Supervision ('da ONES).  A "new" group specifically created to assist in the management of $10 billion+ credit unions:


"The intent of these changes is simple, really.  We must put our resources where the risk is." (Quote from the "Going Through Hell" (GTH) speech.)

Have noted that the assertion of "..where the risk is." doesn't align real closely with the actual NCUSIF losses which have occurred over the last ten years as shown by another slide used internally by the NCUA:


"For most credit unions above the asset threshold for small credit unions, but below $10 billion - you will not see a significant change in exam hours." (Quote from the "GTH" speech.)

Guess it is pretty obvious from the actual loss percentages that 1) the $10 billion+ crowd need more help from NCUA and 2) those CUs $ 50 million to $ 500 million need less.  Now in fairness, these figures do not include the losses incurred by the Corporates - which were the credit unions previously "examined and supervised" by the "existing resources" ('da "old" ONES) being  reorganized into the " 'da new ONES".

But let's take a look at the real numbers...


.... this "data" (for the last 10 years) also from an internal NCUA slide:

Total Number of Failed CUs:  224

Total Losses: @ $890 million 

By Asset Category:

*  $ 0 to $100 million - 207 CUs failed for a loss of $280 million.
*  $ 100 million to $250 million - 11 CUs failed for a loss of $115 million.
*  $ 250 million to $350 million - 5 CUs failed for a loss of $457 million.
*  $ 350 million to $500 million - 0 CUs failed for a loss of $0.
*  $ 500 million to $750 million - 0 CUs failed for a loss of $0.
*  $ 750 to $ 1 billion - 0 CUs failed for a loss of $0.
*  $ 1 billion to $1.5 billion - 0 CUs failed for a loss of $0.
*  $ 1.5 billion to $ 2 billion - 1 CU failed for a loss of $38 million.
*  $ 2 billion to $ 5 billion - 0 CUs failed for a loss of $0.
*  $ 5 billion to $ 10 billion - 0 CUs failed for a loss of $0.
*  $ 10 billion + - 0 CUs failed for a loss of $0.

Let's make that 10-year loss data a bit clearer: 

("... simple, really.")

(Yes, as simple as "1- 2- 3", really.)

1)  $0 to $350 million in assets - 

• 224 CUs failed (99.5% of total failures) 
• $ 852 million loss (96% of total losses).

2)  $ 350 million to $ 10 billion in assets - 

•  1 CU failed (0.5% of total failures)    
•  $ 38 million loss (4 % of total losses).

3)  $10 billion+ in assets - 

•  0 CUs failed (0% of total failures) 
•  $ 0 loss ( 0% 0f total losses). 

"And as you can see on this slide, the distribution of exam hours and risk is clearly out of balance.  ....simple, really.  We need to put our resources where the risk is." (from the "GTH" speech!**)

The unbelievable "sliding" toward the incredible.....

(...and you still see no need for reform?)

** You can view the entire "GTH" approach at NCUA.gov