Wednesday, December 05, 2012

My, My, Mayan..... Disaster Recovery Planning.

We're all soon to be put
 in "Time Out"?
Well, the clock is ticking down pretty rapidly on the Mayan "rapture event" scheduled for 12-21-12.  We recently talked about the critical importance (according to NCUA "guidance") of having a well-documented and faithfully followed strategic plan (see "Sitting Bull" post - 11/29/12). As you know a disaster recovery (DR) plan is another "DOR-or-else" document which all credit unions are required to maintain.

Don't know about you, but I'm not exactly sure how to proceed with DR planning for the end of the world.  I know it's important because NCUA says it is, but.... where do you start on the day after the world ends?  What do you do first? 

Some folks say just don't worry about it, but I don't think that's permitted under current regulation.  And besides, ever since the NCUA was so thoroughly embarrassed by its "100% miss" on the Corporate debacle; they appear to have subscribed to "end of the world" forecasting scenarios in all their regulatory exams - especially with regards to IRR and ALM.  Guess the only way NCUA can avoid looking foolish again is to "cry risk-wolf" at the extreme on all issues.

If we're going to continue to take the issue of DR planning (and the NCUA) seriously, it would seem to me that the only logical course of action, at this point, is to proceed with "The Big Lie" on the Mayan concern.

Just say: "The credit union is fully prepared for all eventualities should the Mayans' prediction prove to be accurate."

Now, some of you probably have some moral and ethical problems with lying; but then again, some of you of course don't. But, let's logically analyze the potential risks and consequences of "The Big Lie" strategy.

First, if you get lucky and everything really does work out, where's the harm?  Your members are happy and you have earned acclaim for early and decisive action on difficult issues. 

On the other hand, if you do experience a world ending disaster on 12/21/12, a bit of lying will probably be among the least of your worries.  And, your lawyers really aren't going to charge you that much more for a prevarication defense.

Anyway, I have taken the safest DR approach to the Mayan mega-mess and written to the NCUA "for guidance" on this issue.  They said they would get back to me after the first of the year.....


Belfor Houston said...

well if it really is the end of the world than for all intents and purposes you're as good as dead so why worry about it eh.

Jim Blaine said...

Really you're such a fatalist....