Attack Dog Politics...

Needs a muzzle !

The banking trade associations have a hang-up about credit unions, often to the point of seeming irrationality!  It's not unusual for the rhetoric to go ballistic with an "attack dog" vehemence!

Which leads to the question:

"What is black and brown and looks good on an overly aggressive b-worder?

From The Field....

"Was contacted this month to participate in a branch audit.  I haven't been on an audit since 2010; so, I was more than willing to sign-on to help out. " 


"Did I mention I have 3 kids at home ? Of course this had absolutely no bearing on my immediate reply:" 

"YES !!!! YES !!!! YES !!!!!" 

( Right, no bearing at all....)

From The Field....

(... and hopefully with an
improving economy !!)

"The forecast for 2013 is mostly busy...."

What Fathers Worry About...

"When your daughter comes home at 3:00 a.m. - late from a date -  with a distant look in her eye and a Gideons Bible under her arm..."

Misdirection.....

("Two snakes mating
over a rubber ball?")

Well, the New Year kicked-off with a brand new group of words in the e-mail file ! (Always need something else to read - don't you ??)  It was saved from the automatic "j-mail" can and slipped past the spam filter because it bore the CUNA logo....

The title of the e-mail was : 

"The Cheney Report" 

 A weekly update from Bill Cheney, CUNA President & CEO.

It was pitched as a new weekly newsletter which will include key events and policy (E&P) developments affecting credit unions. The two pages featured 3 E&P's for the week of January 11: 1) CFPB, 2) Congress, and 3) NCUA.  Here's the summary and action plan:

1. CFPB - "... quick to unveil new regs  affecting credit unions.... qualified mortgage (QM) standards.... will continue to lobby the bureau..."
2. Congress - "Fiscal Cliff;  Tax Reform; ... the credit union tax exemption is our top priority."
3.  NCUA - "Small credit union/$50 million; national exam survey to assist with NCUA advocacy efforts."

"The bottom line is this: We must be ready to mobilize our grassroots and educate our 95 million members, and that's our plan."

Before I reset the filter, two observations:

Buzz on Biz ??

First, is it just me or is anyone else "a bit surprised" at the total absence of any comment or outcome explanation from the leadership on BIZ LOANS - "our top priority" from last year... and the prior year... and the...? (Silence of the Spams?)

And second, I think it might be wise for....

From The Field...

Only At Christmas ...

"The month ended with a crash.  A large truck ran off the road and demolished the Town's manger scene that was displayed on the street in front of our building. The driver was ok; he had choked on a potato chip...."

Guess that proves at least one thing....

You Auto Know Better...

And we intend to continue to
drive that point home !!

Well, you can say what you like, but there is absolutely no difference between banks and credit unions - both are in the banking business !!

   
    - ABA on credit unions

Oh, really? Guess with that kind of "simple" logic 

 you would claim that....

NCUA Mitigate Thyself ! ....

Deja vu all over again !?

Let me give you a very succinct example of why reform at the NCUA should be your Number 1, Number 2, and Number 3 priorities in 2013.

Note these precise quotes:

"[The Corporate's] failure resulted from a number of factors, including an inappropriate investment strategy, an inadequate risk management system and insufficient board oversight, lax regulatory supervision and examination, and inadequate capital."

"NCUA's supervision of [The Corporate] was ineffective on several fronts. For four years, NCUA essentially tolerated weaknesses in [The Corporate's] internal controls; also, examiners who lacked investment expertise evaluated individual securities rather than securities portfolios, overlooking aggregate interest rate risk."

"[The Corporate's] failure raises concerns about interest rate risk being taken by credit unions, especially in CMO investments. Corporate credit unions are more likely to hold CMOs in their portfolios than are their members."

"NCUA not only let [The Corporate] take on substantial investment risk without sufficient controls, it also failed to evaluate the risk of [The Corporate's] entire portfolio or to reflect that risk in assigning CAMEL ratings for [The Corporate]."

"NCUA raised [The Corporate's] CAMEL rating from a 3 in [YEAR] to a 1 (the highest rating) in [3 years later], even though it had increased its exposure to CMOs and had failed to effectively address problems raised in previous exams."

Now about this point the apologists at and the apologists for the NCUA are mumbling platitudes such as:

"The Great Recession is different, no one could have seen it coming.  The collapse of the Corporates is such old news. CMOs and mortgage backed securities were new to everybody.  It's not fair to keep penalizing the Agency for a unique, unforeseeable, once-in-a-lifetime crisis."

Well, actually they're right about one thing, it is old news...

Haiku For You....

All That

Tell me who you are.

There is no dark mystery.

I already know.

Life.....

" Everything is about passion."

Blurred Vision...

I just don't see it !
(... Nor get it !)

These days the difference between banks and credit unions has become blurred.

- ABA on credit unions

"The difference" remains and has not changed :

 Banks were created to make money; credit unions were created to make a difference.

The Perfect NCUA Board .... Part II

The NCUA Board is composed of three individuals appointed by the President of the United States, confirmed by Congress. Currently, there are but two active members of the Board; and, the term of one of the sitting Board members will expire in August of 2013. Reappointments are not permitted.

Meow !  Meow !

Two fresh faces on the Board holds out the potential for a much needed refresh and renewal at the Agency.  The long overdue, 
and hopefully not yet complete, departure of several senior staff - many a bit beyond the "sell by" date of their professional shelf-life - holds additional promise. 

As you will recall, the ideal, fairytale NCUA Board of the future proposed last week (1/2/13 post) was....

... The Three Little Bairs !

All dreaming aside, these two upcoming appointments are crucial to the future, and perhaps the survival, of the credit union movement.  We are no longer in an economic, nor political environment, which will forgive , nor overlook, continued "foolishness".

We need "world-class" leadership - now !!  But, if the  "foolishness" is permitted to continue...

Troubled Condition...

"TROUBLED CONDITION"

According to the CUTimes (1/11/13), the NCUA Board yesterday approved another self-justified and self-serving new rule which permits the Agency to independently designate a state-chartered CU as "in troubled condition," which generally means a CAMEL 4/5 code rating.  

The NCUA took this action over the "criticism from trade associations concerned it meant the dual chartering system would take a hit." NCUA's respect for our trade associations, particularly CUNA and NASCUS, is of course well-known and of long standing. The rule change, however, should not have come as a surprise. 

In August 2010, NCUA officiously announced it would begin issuing independent CAMEL ratings for state-chartered CUs - ending a long tradition of concurrence with and deference to the CAMEL rating issued by the state regulator - the controlling legal authority on these matters. Those paying attention at the time raised questions concerning which CAMEL rating would take precedence should disagreements occur?  Our national trade associations promised to write letters to and to "do lunch" with NCUA to resolve the concern.

L'etat-charter, c'est moi!

Evidently NCUA was polite and tolerated the lunch well; and as usual "brushed off" the supplications and "shoo-ed away the silly peasants".

But, take a look at what else NCUA said....

Banking Innovation...

B-oink !! B-oink !!

"It's a pretty sorry state of affairs when fairness is considered an innovation in finance."

Would the Country really be that worse off if the CFPB....

Don't Worry! Happens All The Time...

Too little, Too late, Too often...

Well, as many of you know, it's time once again for credit unions to file year-end financial statistics  with NCUA on Form 5300 (the "Call Reports"). The data is filed by both federally-chartered CUs and by federally-insured, state-chartered CUs (FISCUs).  NCUA considers the call reports as critical to national security, much like CAMEL codes, and becomes rather "poutish" when even minor, seemingly inconsequential, errors are found.  

NCUA Call Report Training....

Under the current regime, NCUA has even been known to slap CUs with regulatory "Documents of Resolutions" ("DORs") - sort of like regulatory water-boarding - and with adverse examination "Findings" - similar to a gleeful flogging - for instances of type-itis, fat thumbery, and Excel-o-dramas.  Like your least favorite third grade teacher, NCUA  expects: 

"CREDIT UNIONS PLEASE CHECK YOUR WORK !!"

But, guess what....

From The Field....

"Having a teenage son has become a "learning experience"; he is the only person I know who can stuff a giant size cup into the rear ashtray of a Volkswagen.... "

(Well, what was he supposed to do with it?)

And any way, be thankful; it ....

Indentured Servants....

"... and having graduated with a B.S. in Political Science, our daughter looks forward to moving on to the next chapter in her life...."

Highly Questionable .... At The Edge Of Irresponsibility .

A Ten Question Test Of Our New Year's Irresolution?

1. Q:  Did the CU regulatory system fail in 2008?
2. Q:  What were the reasons for the CU regulatory system failure?
3. Q:  Why did the CU regulatory system fail to anticipate the failure?
4. Q:  Who was responsible for the CU regulatory failure?
5. Q:  What were the financial costs of the CU regulatory failure?
6. Q:  What has changed within the CU regulatory system to prevent a reoccurrence of failure?
7. Q:  Have failed organizational, governance, and personnel structures been replaced within the CU regulatory system?
8. Q:  Why have our trade associations decided to support the continuation of a failed system?
9. Q: What have you personally done to protect your CU and members against the next regulatory failure?
10. Q: Do you think your members want you to continue to act like....

The Perfect NCUA Board....

GET ON BOARD !!

The new year 2013 offers an exceptional opportunity for the credit union movement to achieve significant positive change at the NCUA.  

Why?  Because two NCUA Board seats will become vacant.  We all should demand that these important positions be filled with knowledgeable, experienced, and independent critical leaders.  It's for the good of all - including NCUA - if credibility is to be restored.

With tens of millions of U.S. consumers invested in credit unions, as member-owners, and with $1+ trillion of their hard-earned life savings at stake; 2013 provides the opportunity for positive change, a new direction.  We can not and should not accept "also rans" or  "somebody's distant second choice" for these important  positions.  Or else we will, de facto, acknowledge the age old slander of our adversaries that credit unions are little more than "also rans", "somebody's distant second choice."

Wishful thinking you say.  You're living in "La-La land"; our leadership does not appear to have the requisite "X-mas ornaments" to make such a bold stand!

Well, maybe so, but we can dream of a fairytale ending, can't we?  In my view that ideal, fairytale NCUA Board would be....

ONE/ONE !!!

 O-O-O-O-O-........
      .... feels like we just went over a cliff !!!!

(Is this slightly blurry to you ? Or is it just me....)

                  
                   .... ARRAAGGHH ....  O-W-W-C-H-H... !!

Where are those...