Thursday, February 28, 2013

Another Test Of Patience.... Pop Quiz # 2

Pop Quiz..Part  2...

How about one more little pop quiz? Again multiple choice to help you narrow down the list of possible answers.

Ready?  Here we go:

In the February 27, 2013 post ("Plausible Deniability... Case In Point"), NCUA's latest example of appearing either silly or lacking in any type of professional review process was outlined. This latest snafu dealt with NCUA's Director of Examinations deciding to unilaterally overrule NCUA's Office of General Counsel on an exam finding, dealing with the credit union-owned Members' Trust Co. Caught in flagrante delicto (an Italian fiasco in otherwords), NCUA is evidently working feverishly and sheepishly to correct the "unforced error".  

As we all wait, with bated breath, for NCUA's explanation here's the question of the day:

Q: Which NCUA Region "created" this unnecessary embarrassment for NCUA - for all of us?

As with the prior quiz you have four choices A, B, C, or D....

Wednesday, February 27, 2013

Plausible Deniability.... Case In Point

Z-Z-Z-Z-TAM !!!
Not a pretty
picture !!

Sometimes the gods of irony conspire to force us to stop .... and confront our very human foolishness. 

And, they seem to take great glee in pushing us in front of very large mirrors, in the most public of settings, at the worst possible moments. One of those ridiculous moments arose at the CUNA GAC yesterday. 

One of the "cornerstone events" of the GAC is the Herb Wegner Memorial Awards dinner sponsored by the National Credit Union Foundation (NCUF).  The finest and brightest people and ideas in the credit union movement are justly recognized and honored

The NCUF is the charitable, social responsibility arm of CUNA - the focal point for all credit unions to "UNITE FOR GOOD"! - or so you'd think.

Plausible Deniability...

"We won't get fooled again..."
To North Carolina state-chartered credit unions watching the recent brouhaha at Commodore Perry FCU, it sure looked like "deja vu all over again" !!  Been there done that - same serial retaliators, same incestuous good ole' boy network, same "modus operandi" - misstep, misstate, mislead then ... COVERUP !!

Pretty hard to take seriously an "appeals process" administered by a "Pin-ball Wizard" Agency with a growing track record for being purposefully and consistently "deaf, dumb, and blind". The regional director's ability to rule on an examination appeal without reviewing the evidence on both sides speaks volumes as to why the current process is viewed by credit unions as laughable at best, sinister at heart, arrogant, dishonest.  Reform can no longer wait ...
"The CPFCU Four"

Certainly the most ridiculous part in the CPFCU fiasco is the OIG finding that you just can't trust female employees to spot sexual harassment  [guess it's because females have so little experience with that topic].
 Strange Fruit Credit Unions

How does NCUA continue to escape the noose of accountability, while innocent credit unions are sent- willy-nilly - to the gallows?  NCUA - accuser, prosecutor, judge, and jury -  has become an unappealing and undemocratic idea.  Reform can no longer wait...

The  NCUA senior staff - and perhaps the NCUA Board - is playing a  highly dangerous game of "plausible deniability" ....

Tuesday, February 26, 2013

The "REAL" IRR......


The New Credit Union Administration

Have you signed the petition yet?


Fred Becker and NAFCU Get IRR-itable with NCUA ....

IRR-ate !!

Fred Becker long-time, soon-to-be-ex CEO of NAFCU has fired off another round at the 'New' Credit Union Administration (NCUA) over 
IRR-esponsible exam practices.

In a letter dated February 22, 2013, Mr. Becker complained about "the substitution of examiners' opinion and judgment for management's decisions" in IRR exams at NAFCU member credit unions. Although the 'New' Credit Union Administration (NCUA) welcomes the use of individual credit union specific IRR data "in many of it's letters and policies"... in practice "in examinations the 'New' Credit Union Administration(NCUA) has disregarded that data..."

 So, despite the assurances yesterday at GAC (only one day after Fred Becker's letter )  that "things had changed at the 'New' Credit Union Administration(NCUA)...... the here and now at NCUA looks very much like the then and there at NCUA.

By the way, here's how "they" practiced their foolishness at one credit union with which I am familiar...

Monday, February 25, 2013

"Hit and Ms." Leadership... New Message at Today's GAC ? Or Same Old....

The Future is straight ahead ...

Credit Unions today are struggling to steer down a difficult and uncertain road into the future.....

An exceedingly challenging task !  

We have lots of experience
 with predicting the future;
just look at our track record of success!
We are increasingly being "assisted" by an erratic back-seat driver who has, in the recent past, repeatedly flunked both the "vision" test and the"driving" exam ....

A "DRIVER" who is swerving toward the future with "Hit and Ms." leadership, while fully and firmly focused on the rear view mirror.... 

The New Vision Thang...

UC ?
CUNA will roll out "The New Vision Thang" today...!!!!

We will at long last, finally know what we're supposed to be doing !!  

Can hardly wait to be told by CUNA where to go !!!

Always intrigued by announcements such as this! Always makes me wonder whether our collective wisdom is enhanced when filtered through the political bowels of a trade association?  I'm sure that a lot of nutritious ideas are being fed into the system; it will be interesting to see what comes out.

Appears from the initial comments that "The New Vision Thang" will feature membership and assets goals; value statements ; some sloganeering; a ten-year plan; a common goal; and a focus on heightened awareness.  Might also suspect that the "The New Vision Thang" will be "themed" and supported with color-coordinated marketing materials, featuring "bright and shiny people" - preferably of an X, Y, Z Gen.

For our visionaries, a couple of points to ponder....

Saturday, February 23, 2013

From The Field...

"We have a net gain of $5,961 this year from candy sales.  I am pleased with the funds... but at some point you have to start wondering about the body fat of the membership..."

(More than one way to build the membership base... )

Friday, February 22, 2013

A Fine Whine....

Well guess we've all had more than enough sips from the glass of wisdom put forth in the NCUA OIG letter to Congressman Darrell Issa - right ?  

"My cup (and patience !) runneth over."

But the letter, with all its glaring failings, is vintage NCUA. The Agency, in its actions, is reminiscent of the finest French Beaujolais....

Thursday, February 21, 2013

A String of Wet Sponges: OMG...OIG !!!

Balanced legal review ?
Congressman Issa in his October 16, 2012 letter  asked NCUA OIG to independently investigate the use of contingency fee arrangements by the Agency with outside counsel.  The Wall Street Journal front-paged the fact that contingency fees weren't used by other federal regulatory agencies due to a Presidential Executive Order ban and that the "sweetheart deals" had cost credit union owners of the NCUSIF $42 million - so far !

Had the NCUA General Counsel and Board acted legally?  OIG's task was to explore that legal decision. Here's how OIG conducted that independent legal research (it's on page 5 of the Issa letter):

"On November 16, 2012, the NCUA Office of the General Counsel [OGC were the folks OIG was supposed to be investigating!] sent the OIG Counsel an email entitled "Legal Opinion on Applicability of E. O. 13433." In that email, the OGC stated that "[w]e recently requested the attached opinion, I am forwarding it to you as it might be of interest in connection with your investigation."

The legal opinion [called the "Cooper opinion"] was dated November 15, 2012 and OIG states... "Consequently, in the spirit of full disclosure and attribution, we note that OIG Counsel's legal analysis ... derive in part from the Cooper opinion.  On January 2, 2013, representatives from my office met with your office [Issa's staff] to discuss the Cooper opinion and the circumstances surrounding the OIG Counsel's receipt of it."

"The circumstances surrounding..." Yep, even the OIG realized that having the suspect conduct your legal research for you smells of dead fish.  But this seems to be in line with NCUA's standards..... 

To measure fairly, the true value and veracity of The "OMG...OIG" Letter to Congressman Issa, no one has ever said it better than H. L. Mencken:

Wednesday, February 20, 2013

NCUA Stewardship...."Fully Confident"...

"Bovine Scatology"?
As we continue to take a look at and a whiff of NCUA's $42+ million "Pass The Cash" contingency legal fee arrangements, it might be wise to drop back a bit and see what some other folks have said about these seemingly "wink wink" deals:

"It is hard for us to understand how the arrangement isn't in violation of the Executive Order", adding that it is "at least a clear violation of the spirit of the Executive Order."
               - Lisa A Rickard, President of the Institute for Legal 
                      Reform (WSJ - 10/26/12)

"Contingency fee arrangements impose exorbitant or unnecessary costs on taxpayers who have a right to expect the government to operate transparently and efficiently."
- Congressman Darrell Issa, Chair House Oversight Committee
       on Gov't Reform (WSJ -10/26/12)

"A Justice Department spokesman said that officials were unaware of any other federal agency that has outside firms on contingency fee contracts." (WSJ - 10/26/12)

But as we all have come to learn over the last several years, NCUA doesn't seem to really care what others think - whether its plain old CU folks, their regulatory peers, CPAs, taxpayers, or some quaint Executive Order from two Presidents of the United States of America.

After all NCUA is an "independent government agency" apparently answerable and accountable to no one.  NCUA operates in its own separate universe in Alexandria; NCUA follows its own set of rules.

Or does it ....

Monday, February 18, 2013

"It Wasn't ME !".....

Odious ... and odiferous?
(Bad ... and stinky?)
In case you came in late, we're working through "The 7 Deadly Sins" of omission in the 2/6/2013 NCUA OIG letter to Congressman Darrell Issa, responding to his inquiry into NCUA's payment of $42 million (so far!) in contingency legal fees to two politically well-connected Chicago law firms.... 
OIG says everything is A-O-K !!

Today let's take a look at the suspected presence of a serious game of political "Pass The Cash" which the Wall Street Journal (WSJ) implies drove this highly unusual transaction...

Let's start with what the CUTimes said in its 2/12/2013 article
( "OIG Tells Issa Contingency Fees Reasonable, ..."about the OIG's findings:

"The OIG also investigated charges raised in October by the WSJ that the NCUA selected firms based upon political affiliation, because partners in both retained law firms have public records of donations to Democratic candidates. Current Chairman Debbie Matz is also a Democrat."

"However, the decision to retain the firms was deliberated under Republican Michael Fryzel's chairmanship, and the NCUA signed the agreement one week prior to Matz's swearing in on August 24, 2009." (CUTimes)

P - U !!  Before ... and after !!
Since this blogpost is going a bit long,  I'm going to ask you to look for yourself into this one - go back to the OIG letter  and read the second paragraph carefully under:  
"C. Standards of Neutrality" 
(... it's on page 10!)

.... you will note OIG says that the contingency fee agreements were signed "... on September 1, 2009 - one week after she [Ms. Matz] assumed the Chairmanship..."

Sunday, February 17, 2013

Haiku For You ....

Two Things You Know

Loves her granddaughter,
T-H-I-S M-U-C-H, and you will never
Be her granddaughter.

Saturday, February 16, 2013

From The Field...

"Unsurprisingly, the major concern of the month was my wedding on the 25th.  Everything went off without a hitch..."

(Sorry it didn't work out...)

Risk Assessment...

"Only those who will risk going too far can possibly find out
 how far one can go."
- T.S. Eliot

Friday, February 15, 2013

Now You're UnAmerican To Question NCUA........

It's NCUA again, Sir.
"Executive Order (EO) 13433, "Protecting American
Taxpayers From Payment of Contingency Fees" prohibits the use of contingency fee arrangements by Executive Branch agencies in order "to ensure the integrity and effective supervision of the legal and expert witness services provided to or on behalf of the United States."
                           (NCUA OIG Report - 2/6/13)

EO 13433 was issued by President George Bush on May 16, 2007 and has been continued and affirmed by the administration of President Obama.  The EO was issued and has been continued because it was clear that contingency legal fee arrangements by federal government departments are damaging to the best interests of the American taxpayer and damaging to the integrity and effectiveness of the federal government.

The NCUA OIG with its usual aplomb justifies the Agency's exemption from this rule - applied to all other federal government departments - on a "walk-a-mile-in-my shoes" legal technicality and skirts the fact that other comparable agencies such as FDIC and the FHFA have chosen to abide by the EO despite any  "legal niceties".  Other federal agencies appear to place a higher value on the intent and principles underlying the EO - and appear to be much more fully concerned with the question of integrity.

But, here's the quote from the NCUA OIG letter to Congressman Issa that should blow the fuse of every credit union in this Country:

"Additionally, we are aware that the NCUA has also taken the position that the EO does not apply to NCUA because the agency does not receive appropriated funds for its insurance or regulatory functions.  The NCUA bases its position on the apparent intent of the EO which, as its title eponymously asserts [ isn't that a cute little phrase!], is to protect American taxpayers from appropriated agencies' payment of contingency fees. (Emphasis added.)  We agree with this position." 

As the OIG, on behalf of its master NCUA, yet once again so clearly emphasizes, neither Congress nor the White House - Democratic nor Republican - can protect you (since you're not an American taxpayer in NCUA's opinion) from this....

Thursday, February 14, 2013

Falling Short At NCUA

Well, hope by now you have read the OIG letter to Congressman Issa concerning those $42 million in "contingent" legal fees paid out by NCUA under "less than clear" circumstances.  

OIG is no NCIS !!

Kinda know you're likely to find some dirt if you dig into a hole filled with both DC and Chicago "politics". Don't take my word on it ask Blagojevich !  Guess the other thing that is painfully clear from the letter is that Mr. DeSarno from OIG is no Jethro Gibbs from NCIS!  As to those OIG "conclusions":  Oversight? Overlooked? Overripe? Overt? (or OMG!... "these are the conclusions upon which our facts were based.") 

John Kay writes for The Financial Times.  He had an interesting opinion piece (2/06/2012) on fiduciary responsibility and the financial industry recently. Here's an excerpt:

"Fiduciary standards describe how people should behave when they manage the affairs of others.  The key elements of the concept are loyalty - put your responsibilities to others ahead of your own interests - and prudence - discharge your responsibilities with care and skill.  Conformity to fiduciary standards also means avoiding conflicts of interest.  If conflicts of interest cannot be avoided, they should be disclosed."

Seemingly pretty standard stuff - right?  But here is John Kay's punchline and the concern you should have over the OIG letter and several of its conclusions:
Tell them to eat it....

"The reputation of finance has been degraded by the actions of a few.  But the few have been running the show, and have imposed inappropriate values on once respected institutions."

..... it would appear that "the few" at NCUA have lost sight of their duty of loyalty, their duty of prudence.  

We'll take a look tomorrow at where NCUA is falling short - well short - of their responsibilities.   And, why your reputation, your respected institution is at stake.

But here's a little "appetizer" about how well OIG does its' homework. From the Issa letter:  

"The [FDIC] attorney we spoke with further declined to confirm or deny that it was FDIC's current policy to avoid contingency fee arrangements."

And, here's what the Wall Street Journal (10/26/2012) said in its article:  

"The Federal Deposit Insurance Corp. generally avoids contingency fee arrangements, an FDIC spokesman said."

SOMEBODY IS FIBBING !!! (Don't think it's the FDIC, do you?)

Hope you get the whiff  drift of a less than thorough, perhaps less than arms length opinion....

... unfortunately this is the mildest stench - stay tuned!

Tuesday, February 12, 2013

Budget Surplus & Mardi Gras Management

"NCUA is committed to providing transparency to the public about the Agency's budget."

                                         - NCUA. gov (Feb, 2013)

Here's a quick look at our latest 2013 budget.....

Sunday, February 10, 2013

Saturday, February 09, 2013

Too Busy To Bother...?

"It's not enough to be busy... the question is:

What are we busy about?"

- Henry David Thoreau

Thursday, February 07, 2013

On Being State-Chartered...

Taking another direct hit....
... from "Hit and Ms."....

"In the end, we will remember not the words of our enemies, but the silence of our friends."

                - Martin Luther King, Jr.

State-chartered CUs - heading for the back of the bus because of...

Wednesday, February 06, 2013

On Losing A Special Neighbor...

Her obituary said in part:

"....she enjoyed being where she was and with whom she shared the experience. 
 She was never in a hurry to get somewhere else.
She was that way with her friends, 
who remember feeling better about themselves
for being with her." wasn't actually formatted as poetry,
 but clearly it is....
.... and so was she!

Tuesday, February 05, 2013

NCUA Releases 4Qtr. Economic Data.... !!!

We like to think we have
 "eyes in the back of our heads" !!*

The robots robuts robust** economists over at the Agency have released their very latest forecasts of the past!!

"We're not quite sure how you should thank us for all that you have accomplished under our super-really super!!-vision.  At the end of the 4th quarter we are now more certain than ever that our current predictions for 2012 will give you sound guidance on what you have already accomplished."

"After all, those who fail to plan for the past can never change it."

"And, besides if you attempt to venture out of the absolute certainty of last quarter, last year, last century; we will most assuredly "DOR" you as a threat to the NCUSIF!  We're comfortable with the past; why can't you be?

All this new-fangled, "outside-the-box", change-change-change thinking !!! It's just more "risk-risk-risk" in disguise.  We don't get over paid to take risks (nor to be accountable) and we will not let any reckless forward-thinking, endanger our unblemished record of safety and soundness with your money our Fund.

We've tried to threaten you listen to you about this "RISK THING"!! But we want you to know we've now drawn a line in the sand on risk and have defined for all of "you people" the boundaries of our combat comfort zone.......

Monday, February 04, 2013

Fill In The "_____" ....

" A fool with a  ______  is still a fool."

A).  Tool

     B).  Degree

                                                   C.)   Title

Sunday, February 03, 2013

Haiku For You....


She calls for closeness
Which he can best deliver
By staying away.

Saturday, February 02, 2013

Missed Opportunities...

"Our doubts are traitors and make us lose the good we oft might win by fearing to attempt."

- W. Shakespeare

Friday, February 01, 2013

Happy Ground Hog Day !!!!

February, 2013
"Banks And Credit Unions Vow Scorched Earth, Battle To The Death Political War Over
 Taxation !!! "

February, 2012
"Banks And Credit Unions Vow Scorched Earth, Battle To The Death Political War Over
 Taxation !!! "

February, 2011
"Banks And Credit Unions Vow Scorched Earth, Battle To The Death Political War Over
 Taxation !!!"