Friday, January 31, 2014

Honoring Pete Seeger....

For Pete's sake !
Someone recently mentioned "another little known fact" about the new NCUA risk-based capital rule - the importance of the release date!

Had you heard that NCUA timed the release date of the rule to honor the passing of legendary folk singer Pete Seeger? I hadn't heard that one either!

Was surprised because as you know, NCUA is not exactly famous for its' folksiness, positive "kumbayah attitude", nor its' populist, progressive, empowerment approach to human relations (... to put it mildly!).

So, what's the deal?  Evidently the "powers-that-be" at NCUA greatly admired Pete Seeger's song writing abilities. Given the new capital rule and the threatened $2-million
 "Achtung!" 5300 report late fee , looks like the theme song at the Agency may be Seeger's classic original.... 

Thursday, January 30, 2014


Risk wait ?


If you have not found yours, you should - you must - stop and do the search….

( Don't waste a lifetime.)

Tuesday, January 28, 2014

New Risk-Weighted Capital Rule: Penalizing Credit Union Homebuyers...

A strong, "toxic" mix
of risk and bull?
Well, the "New NCUA" has issued its "long feared", risked-weighted capital proposal to small applause.  You can be sure "the fight is on" in many arenas, depending on where and how severely your individual credit union's "ox was gored" by the new, proposed rule.
So. where should we start? Why don't we do something "credit unionish" and start with the member!
Under the NCUA proposed rule, a credit union member residential mortgage loan will be risk-weighted as follows:
0 to 25% of assets: 50% risk-weight
25% to 35% of assets: 75% risk-weight      
35% to 100% of assets: 100% risk-weight
The banking industry has also implemented a risk-weighted structure for banks. The risk weight for a bank residential mortgage loan is:
0 to 100% of assets:  50% risk-weight 
So, in NCUA's infinite wisdom, the risk of a credit union member mortgage loan is higher than the riskiness of a bank customer mortgage loan (despite numerous research studies which prove exactly the opposite). 
It's not too hard to imagine a credit union member refinancing her home from the local bank to the local credit union - same property, same terms, same rate, same "QM" underwriting, same perfect credit rating - and the NCUA declaring that the mortgage "magically" became twice as risky at the credit union - the identical mortgage may require a capital charge of 100% more as soon as it hits the credit union's balance sheet! 
So, the first question of the day for the "robust"* capital gnomes at NCUA is.... 

Monday, January 27, 2014

Over, Under and...Out!

Any "Authoritarians"
come to mind?

"Failing organizations are usually over-managed and under-led.

- Warren G. Bennis

(Never heard of "micro-leadership", have you?  "Micro-management" is another story…)

Sunday, January 26, 2014

Buddha Listen Up ....

Got That?

"Approach love and cooking with reckless abandon."

- Dalai Lama

Saturday, January 25, 2014

Milk Duds...

Just recycle it …… !!!

"I am very thankful for laughter, except when milk comes out of my nose."

- Woody Allen

Thursday, January 23, 2014

Unloosening A Cannon…. "D-Day" For Credit Unions!

Totally risk free…
Just ask Jamie Dimon!
Well, before the day is out our federal regulator, "of late maniacally obsessed with risk",  will have purposefully increased the risk of loss for the vast majority of credit unions for the benefit of the very limited few…. 


Derivatives do not reduce risk as proclaimed by advocates and the NCUA.

For Four Reasons:

Wednesday, January 22, 2014

Derivatives: Choosing To Ignore The Facts... Business (BS) As Usual?

Seemingly NCUA, in its current wisdom, is hell-bent on approving the use of derivatives by some credit unions at its Board meeting tomorrow.  

Change of course...
The Agency has for decades pooh-poohed the advantages of derivatives, but now is determined to make a volte-face to correct those prior insensibilities by Board and senior staff. The simple acknowledgment by the Agency that: "We had it wrong and we're now going to correct our errors in thinking. "... may be the most important step forward in the process.  

Hubris, after all, is far more dangerous than derivatives!

As the Agency moves toward a correction in course on risk , there are a number of remaining illogicalities in NCUA's derivatives rule which hopefully will have been reconciled...

Friday, January 17, 2014


There is no risk in
 sitting on your __?__.
(head, hands, ...?)

"Take into account that great love and great achievements involve great risk."

- Dalai Lama

Tuesday, January 14, 2014

Dumbing Down Credit Unions … !?

All those (f)risky little credit unions...!!

" Rules and models destroy genius and art."

- William Hazlitt

(Dumb dee dumb dumb… Dumb dee dumb dumb… Dumb dee dumb dumb… Dumb?!)

Monday, January 13, 2014

NAFCU - In The Hunt On NCUA...

Regulatory "guidance"?
Talked a bit last week (1/09/2014 post) about the risks which arise for credit unions from an insular, isolated and detached regulatory agency ("you know who"!)

But to be clear, in case you think this is just about NCUA bashing, the same risks arise in any business, in any position of authority or responsibility.  Leadership can never be about "democratic consensus", nor "kumbaya unanimity" - legitimate differences and disagreements do exist; but "First Do Know Harm" should be a defining principle and priority in any strategic decision.

Which brings us back to that "insular, isolated, detached regulatory agency"...

Sunday, January 12, 2014

From The Field: "Slap Yo Mama"…??!!

Probably needed a little
"One of the branches in the district held a "Hottest Chili Contest" to raise  funds for the local hospice.  My favorite entry was Jeanine's "Big Red's Bean Bustin', Gut Rippin', Slap Yo Mama and Boil Your Eyes Out Chili", but she did not win…"

(… assume the winner is recovering over at hospice.)

(… or is that possible?)

Saturday, January 11, 2014

Getting Fired Up….!!

In a hot spot?

"If you're going through Hell, keep going."

- Winston Churchill

Wednesday, January 08, 2014

The New World Order...

We're the ONES !!

Beginning this month, the NCUA has launched a new, special division to provide separate oversight for credit unions with assets exceeding $10 billion.  

The new unit is called The Office of National Examination and Supervision ("The ONES" !)

Which leaves the other 6,900 or so credit unions in the second category…..

Tuesday, January 07, 2014

From The Field: "We've Got Your Back…"

Welcome back !!!

" Joan Wyrick returned to work from her back surgery mid-month.  We are glad to have her back…"

( ..and hopefully the rest of her, too.)

Monday, January 06, 2014

As We Edge Toward "Safe Derivatives" For Credit Unions In The New Year ....

"I'm b-a-a-c-k…"

"Derivatives the financial instruments which were primarily responsible for the 2008 financial meltdown… "  

"[Now we have a Congressional] bill that has passed the House which would repeal certain restrictions on derivatives which was written primarily by Citibank lobbyists…"

"In a sign of Wall Street's resurgent influence in Washington, Citigroup's recommendations were reflected in more than 70 lines of the House committee's 85-line bill.  Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word."  

(Lawmakers changed two words to make them plural.)

Take a look at how this anti-corruption group chose to address this "derivatives" matter with the lead Congressional supporter of the bill…

Saturday, January 04, 2014

Just A Mirage?

Why not star?

" If you're not committed to anything, you're just taking up space."

- from the movie "Mirage"

Friday, January 03, 2014

On A New Year Of Regulations..

But, grin and bear it...

"Everyone here is mad.  It's only by chance or careful planning if you are not."

- The Cheshire Cat
   "Alice in Wonderland"

Thursday, January 02, 2014

Possum: One Last Word… Then I'll Drop It !

Can't we just drop this topic
…and move on?

Heard some feedback from several urbane, North Carolina "sophisticates" criticizing "the rubes" in Brasstown for hurting the image of our State with "The Possum Drop"…. y'know the "tsk, tsk, tsk" types.

Well, before the urbanites get too uppity with their critique, think it is appropriate to note that while Brasstown drops a possum on New Year's Eve…

Wednesday, January 01, 2014

Government Of The Possum, By The Possum, And For...


Before we leave that possum behind:

Sure you've been reading a lot of criticism about last year's "do nothing" Congress in Washington.  Gridlock, stalemate, everything's a fight!

Thought you'd like to see how an engaged, activist government - The North Carolina Legislature - can work together, when push comes to shove, to fashion legislation to solve the most critical social issues in our State.

You'll recall that "The Possum Drop" dispute went to court in 2012 over whether or not the N.C. Wildlife Commission (another committee I'd like to work for if the sweet potato appointment (see post of 12/11/2013) doesn't come through. Kinda picture a potential position as "Wildlife Specialist" - great business card to hand out!) - (sorry about that digression) - could legally license the Brasstown event.

When this important issue was brought to the attention of our elected elite in Raleigh, the State Senate took the matter into hand with the following bill….