Wednesday, January 29, 2014

Cheap Tricks…. IMCR


Caught in the act .… again?
If you've ever read a cheap, trashy dime store (guess that's a "dollar store" these days with inflation!) mystery novel, then you know the easiest way to find out "whodunit?" is to start at the back of the book.  

In the final, poorly plotted chapter, the evil-doer is always identified (it was the butler!) and how the murderous crime was committed (with the candlestick in the billiards room!is also revealed.  These run-of-the-mill authors invariably save the worst for last.  The reader hoped for a new, imaginative story line, more deeply drawn characters, and more finely nuanced emotion; but closes the cover - played for a fool once again.

We're not even good
at "sneaky"!
NCUA's recent risk-based capital proposal is much like those trashy mystery novels, the worst crime is revealed in the last chapter of the rule (pages 195-198 of the 198 page printed draft.) Slipped in on the sly in the most common of underhanded fashion.  Hidden at the back with some assurance that you'd "miss it".  Crass trash, something of a signature of the genre.

The entirely new authority which NCUA awards itself ( for its' stellar, recent record of regulatory performance?) is designated as…


Section 747.2006 - Review of order imposing individual minimum capital requirements (IMCR) 

After using up 194 pages (and having a really cute little on-line calculator!) on "patty cake, patty cake" rule writing, which insinuates that 94% of credit unions will be well-capitalized and therefore lulls you into complacency; the NCUA attempts to exempt itself from its own new capital rule…. and in true NCUA fashion, exempt itself from the rule of law in general!!!   

You should take the time to read pages 195-198.  If you do, you can skip the other 194 pages of cheap fiction, because…
  Section 747.2006 overrides all the other supposedly detailed, balanced, new risk-based capital "rules"
(and even disavows that really cute little calculator!).

IMCR simply says that regardless of the capital rules, the NCUA Board may unilaterally impose its own self-created, self-justified, self-serving capital requirements on your credit union …  regardless of the rules. 

Well, that's fair!
You do have the right of course to appeal an arbitrary and capricious "imposition" to…. (you guessed it!)…. to the NCUA!!!

(America's credit unions… played for a fool once again.)

11 comments:

Anonymous said...


This provision should be retitled to "Jack Booted Thug" for IMCR!

Anonymous said...

Where's Cuna when you need them?

Anonymous said...

Where's nafcu when you need them?

Anonymous said...

Where is nascus when you need them?

Anonymous said...

Hell with this... where is CONGRESS when you need them?

Anonymous said...

The real question you all need to be asking is who owns your Credit Union? And do they know you've relegated management responsibility to the Federal Goverment? If any of you are really waiting for CUNA, NAFCU, NASCUS, or Congress to save you, it's going to be a long wait.

Anonymous said...

It seems that credit unions should participate in very open "Civil Disobedience". IF we acquiesce this potential injustice, because it does not effect you presently, you will rue the day when NCUA turns on you.

Anonymous said...

Oh it’s not just the NCUA. At my credit union we no longer display loan rates on a rate board in the lobby because our members are apparently too stupid to understand them without 12 paragraphs of accompanying disclosures. That despite the fact that in my 25 years I am unaware of a single incident where a member was misled or taken advantage of by a loan rate we posted on our rate board. That is courtesy of the CFPB. The list could go on and on. Again, whose credit union is it?

Anonymous said...

I hate to say this, but if you (as in everyone) were paying attention when they were trying to kill all corporates with that new regulation, you would have seen that very language there, in addition to their arbitrary risk weightings and framework. Big lesson here: be careful what you are ok with as long as it doesn't affect you (I'm not small, so I don't care, I'm not big, so I don't care, I'm not a corporate, so I don't care..) because they are attacking our "system" and therefore all of us together (or we die alone and much quicker). They are setting the table and then eating our lunch. Their "me too" language used by the OCC, FDIC, Basel x, y and z to justify their actions has to stop. They need to not only understand why we are different, but write regulatory language that allow us to continue to be different, or we will be "the same" and then can easily go to the FDIC or other path to....

Yes, angry as you can tell, but also trying to insight a riot, as this has gone too far, and for too long, with only a few voices.

Sermon over, pass the plate and end with an amen...

Jim Blaine said...

Amen!

But just another voice in the wilderness...?

Anonymous said...

Little will change until there is a change of administration/party in Washington. That is why political action is important. Even then, improvements will be small (reduced regulation is almost never allowed by the bureaucracy). We all need to respond to the proposed reg. with well thought through comments. No threats, but plenty of logical challenges; first as to the need for additional capital (we survived pretty well during the meltdown). second, we need to challenge them on why we are being treated worse than the banks in many areas by the risk weightings (RE lending,CUSOs, MBLs, deposit at NCUSIF, etc.). Time for credit unions to get active and vocal!
Birddog in Ga