Monday, June 30, 2014

Mirror, Mirror: Who's The Least Fairest Of......

Oxymoron: A good lookin' pig?
The ABA and its affiliates "keep squealing" about credit unions.  Listening to the bank trade associations'
 "chronic oinking and snorting", one would think that CUs are the cause of all their problems.

So, I found the following survey blurb in last week's NC Bankers Association newsletter a bit refreshing. The article discussed the results of the most recent "Millennial Disruption Index", which attempts to gauge the sympathies of the 84 million young Americans born between the years 1981-2000.  

Banks were at the top of the list in terms of businesses which will be disrupted by the onslaught of the Millennials!

And here's what Millennials said they thought about their "b@*ks":

*  53% of Millennials don't think their b@*k offers anything different from other b@*ks.

*  71% of Millennials would rather go to the dentist than listen to what b@*ks are saying.

*  33% are open to switching b@*ks in the next 90 days.

*  50% are counting on tech start-ups to overhaul  how banking works.  

*  33% don't believe they will need a b@*k at all in the future... 
... none expressed disappointment with that idea.

So, ABA and "p-'lets" take another look at where your real problem lies...

Sunday, June 29, 2014

Leaders Who Don't Listen...

We fought to maintain
the Union, not the

"Most men can withstand adversity, but if you want to test a man's character give him power."** 

             - Abraham Lincoln

* * (Some very noticeable examples make it clear that this insight is not gender specific!)

Saturday, June 28, 2014

From The Field...

Test drive... !

"The new software was delayed several times and was clearly not tested prior to instillation."

(Still? Or stalling...?)

Wednesday, June 25, 2014

RBC As A Trial Balloon...???

"We didn't say that, we said..."

"We were well aware that the risk-based capital (RBC) rule needed many adjustments. When issued, it was meant to be a "trial balloon" to gauge credit union industry support ..."

Good thinking, brilliant strategy, nice "balloon"....

Tuesday, June 24, 2014

Cool Hand Duke....


Chairman Matz is planning Listening Sessions for the following dates, times, and locations:

June 26  1:00 - 4:00 pm   Los Angeles
July  10  1:00 - 4:00 pm  Chicago
July  17  1:00 - 4:00 pm  Alexandria

Hope to see you there so we can work on the #1 problem with credit unions...

Monday, June 23, 2014

Heaven Help Us All...

(AFP - Rome 6/16/2014)

There are consequences...
Pope Francis said, "It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences."

Swine before pearls...?

"It is important that ethics once again play its due part in the world of finance" and that markets should "serve the interests of peoples and the common good of humanity."

But credit unions, always a Ray of hope...

Sunday, June 22, 2014

From The Field...

A Tower of Strength

"She is an excellent new employee.  Her strengths include being able to lean quickly..."

(.... evidently a real "Pisa" work...!)

Friday, June 20, 2014

Rants And Raves....

Mitchell News-Journal
*  You know times are bad when someone comes to a single-Mom's home and steals her kid's bike off the porch.

*  The Piney Creek Dirty Fingers Garden Club will meet Tuesday night. It's our annual funraiser.

*   Westbrook middle-schoolers participated in a local plant tour last week at Greenway Gardens Nursery.

*  Think the City should take down the "No Loading" signs in front of the funeral home.  It just don't look right.

And, this week's "run-that-by-me-again" winner....

Thursday, June 19, 2014

It Just Wasn't In The Cards...

(David Morrison - CUTimes 6/17/2014)

"Noted consumer finance celebrity Suze Orman has begun "quietly closing" the Approved Card,.... Orman launched the card to great fanfare in January 2012, on the heels of her appearance in public service spots for the NCUA.  The card immediately caused controversy for credit unions, because it was decoupled and charged card holders fees."

Say "goodnight" Suze...

Wednesday, June 18, 2014

It's Elementary , My Dear Watson ....


Exhibit C:

"I told Mr. Mann the reporter insisted too many times that no one at the NCUA had told him to call us. He mentioned that three or four times. That concerned me since he said it over and over. He was protesting too much." - Blane Mink, CFO of APCO Employees CU on his interview with the WSJ (quoted in the CUTimes 6/13/14).

"NCUA Public Affairs Specialist John [Mr. "Story's Up"] Fairbanks told the CUTimes [6/13/14] no one at the NCUA pitched WSJ on the story or suggested any interview subjects."

A+B+C, to a lot of folks, seem to add up to the need for a little

Another Clear Victory for the Quants...

"The latest polls show the future House Speaker enjoying a 34% advantage with a 4% +/- margin of error..."

R-O-B-U-S-T-E-D !!!!

Somebody can't count ...
(... stochastically speaking !!)

Monday, June 16, 2014

Pigging Out....!!!

America's Banks:
"An Ethics Free Zone"?

"Moral Capital In Secular Decline"

 - John Plender
 Financial Times - 6/10/2014

"And still the revelations come.  Leading banks pay yet more record fines for egregious behavior ranging from sanction-busting to facilitating tax evasion.  Their involvement in rigging markets now extends beyond Libor, the rate at which banks lend to each other, to foreign exchange and the gold market.  It appears to be a pervasive rather than occasional phenomenon.  "

"All this corporate wrongdoing is combined with the immense personal enrichment and a paucity of prosecutions of people at the top.... the financial system appears to have an ethics-free zone."

"As long as incentives are at odds with ethical requirements, common decency will be a minority pursuit. Scandals are inevitable...."


Sunday, June 15, 2014

From The Field...

"A Deck aid?"

"I don't think the Legislature should be trying to take benefits away from our teachers like ten year."

("ten year"..???)

Saturday, June 14, 2014

From The Field...

Pretty silly, heh Kemosabe?
"Just got back from the statewide credit union risk/compliance conference. Heard lots of comments on federal exams.  

Appears most folks rate the local lead exam honcho's abilities as "big hat, no cattle" (as they say in Texas!).

"MR. BIG HAT, NC !!"
"MR. BH, NC !!"

'Course it would be even better as "big sombrero, no cattle" which would leave you with....

Friday, June 13, 2014

Lighting It Up In Birmingham.... "Hold On" !

From "The Birmingham Business Journal" - 6/6/2014
Got to believe that Friday, June 6, 2014 was one of the "flash points" in the distinguished career of Mr. Merrill Mann, CEO of APCO Employees Credit Union in Birmingham, Alabama. Mr. Mann probably came in that Friday with some thought of a leisurely weekend of golf in Tuscaloosa or water-skiing down at Lake Martin.... ah-h-h-h-h, summers can be exceptional in Alabama!

Fire Power !
Match Play!
But, unexpectedly, by 3:00 o'clock in the

 afternoon; the "playing with matches", political recklessness of "some boys and girls" in Virginia had lit a bonfire under APCO's home office, threatening to torch the reputation of the largest credit union in Birmingham. At 2:55 pm APCO got blasted by the Birmingham Business Journal without warning nor cause. What a dangerous surprise, what a great way to start a weekend!!

For those of you unfamiliar with APCO, the credit union is one of the best, most conservatively managed CUs in the Country. Here are a few of its "key ratios" as of March 31, 2014:

Assets:                    $ 2.4 Billion
Well-Capitalized:         9.87% 
Delinquency:                 .48%
Chargeoffs:                   .47%
ROA:                             .77%
Growth:                       7.62%
Net Op. Expense:          .39%**
 (** and no that's not a typo!!!
- Peer Avg. is 2.43% !)

... and those numbers are not flukes or "one-offs", APCO Employees CU has always been this good!!

Liar Fire... !
So, why in the world would "someone" lead the WSJ and The Birmingham Business Journal to believe that APCO "... could see higher losses" [just for the record - looked back a dozen years and APCO has never had a loss!] and was "... an example of how the sector is piling into low-rate, longer term assets, increasing its exposure to potential significant losses if interest rates rise."?  
"Send in
the Clowns..."
Listen, APCO is so well run that it would take an idiot, an absolute fool, or "you know who" to screw it up!  And, it appears that "you know who" is trying to do just that!

But maybe Mr. Mann , the APCO Board, and all the 70,000 APCO members in Alabama "haven't gotten the message" yet. "They" (APCO Employees)  are at risk....

Thursday, June 12, 2014

Alexandria "Fiddles" While...




"I am concerned that the message is not getting through..." - Chairman Matz

Wednesday, June 11, 2014

NCUA Ramps Up Risk...

Well, did you catch this little gem which was published in the WSJ last Friday (6/6/2014)?

Quite an explosive headline with an article to match, which featured this quote from the NCUA:

"Where there's
smoke, there's..."
"I am concerned that the message [about rates] is either not getting through, or it's getting through and they are choosing not to do anything about it," said Debbie Matz, Chairman of the NCUA, who has long sounded the alarm about the industry's exposure to interest-rate risk."

Was a little bit stunned by the quote and many of the examples referenced in the WSJ article.  Clearly not a true picture of  credit unions in general and most definitely not true of the individual credit unions which were profiled. 

Was certain that NCUA would step forward with a letter-to-the-editor to correct and clarify the comments made in the article.  Then I got wind of this:
"Story's up!..."

Seems that "a bunch of the boys" over at the Agency were breathless with excitement, waiting for the WSJ article to appear!  If you don't recognize the names:  Mr. Fairbanks, Office of Public and Congressional Affairs ; Mr. Bosack, Chief of Staff to Chairman Matz ; Mr. Harper, Chief Policy Advisor to Chairman Matz ; Mr. Gill, Senior Strategic Communications and External Relations Advisor to Chairman Matz ; Mr. Worth, NCUA Chief Robusterian ; and Mr. Cole, Director of Capital and Credit Markets.  

An interesting little group spending their Thursday evening [6/5/2014 - the day before publication!] playing with matches, waiting to read this little firestorm-creating, napalm piece... almost looks like a case of arson, doesn't it ?!

Well, y'know boys will be boys!  But you would like to think that a prudential regulator would at least understand that...

Tuesday, June 10, 2014

But This Time Things Are Different...


"WesCorp continues to work towards publishing its audited financial statements [for 2006].  We apologize for the delay and recognize that your credit union may require audited financial statements as part of your due diligence on WesCorp.  In the following paragraphs, we have tried to answer questions you may have regarding the audit and why it has been delayed. Thank you."

1. WesCorp has not yet published its 2006 audited financial statements. What is the delay?

"The delay in delivering the 2006 audited financials is the result of a disagreement between WesCorp's current audit firm, Deloitte & Touche, and it's previous audit firm, KPMG. The disagreement stems from their interpretation of FAS133 hedge accounting rules for WesCorp's derivatives portfolio."

2.  When does WesCorp expect to resolve this difference and issue its audited 2006 financial statements?

"WesCorp expects to issue the audited financial statements in the fourth quarter of 2007."

3.  What is the worst case impact of having to restate financial statements?

"As both D&T and KPMG have recognized, WesCorp's hedges are appropriate, economically sound and present no safety and soundness concerns."

"Over the duration of the derivatives, gains and losses on each position would "wash-out" or have an end result of zero. That is, a gain in one period would be negated by a loss in another, and vice-versa."

4.  Why does WesCorp invest in derivatives?

"Investing in derivatives is an essential part of WesCorp's business and is important to how we add value every day to our members. In addition, derivatives make WesCorp more safe and sound as we are able to reduce and/or eliminate interest rate risk that we would otherwise experience."

"WesCorp did nothing wrong in investing in derivatives...just the opposite is true...we did everything right by investing in derivatives."

5.  Does NCUA continue to maintain a team of expert capital market specialists on-site to monitor and oversee your derivatives trading? Do those reports continue to reach the NCUA Board on a monthly basis?

Monday, June 09, 2014

"Catch 22" Guilt...

"I am the walrus...!"

"An examiner is someone who quite often doesn't know what he is talking about and tries to make you feel like it's...
 your fault !!!"

Which leads to the question...

Q:  What do you get when you cross The Godfather with a "robust" examiner?

Saturday, June 07, 2014

From The Field...

Ding Dong ?!

"It should be our responsibility to make sure that members can always find a place to park when dong business at the CU."

( Oh Lord, why me....)

Friday, June 06, 2014

Regulatory Pictogram...

Good Question!

Q: Who wrote and approved the proposed NCUA risk-based capital (RBC) rule? 

A:  It was evidently a "very robust" group of...

Wednesday, June 04, 2014

Staying Mis-Informed....

This ain't funny any more...

"If you don't read the risk-based capital (RBC) rule you will be uninformed; if you do read the RBC rule you will be misinformed."

- Mark Twain

Tuesday, June 03, 2014

Ms. Information....

NCUA creates Congressional
Representative Peter T. King (R-NY) sent a letter of concern to the NCUA inquiring about the economic consequences and collateral damage to credit union members which will result from the slipshod drafting of the proposed NCUA risk-based capital rule (RBC).  Representative King was both polite and discrete in his questions and comments about the proposed RBC rule. The Congressional letter to NCUA was signed by over 300+ members of the House of Representatives.

Here's Ms. Matz' reply to Representative King and to the majority of House members who co-signed the letter: 

Ms. Matz' Letter from NCUA to Congress on RBC

Given the haphazard drafting by the NCUA staff of this critically important RBC reg - as so succinctly, brutally, and devastatingly pinpointed in 2000 comment letters; it is with growing caution and suspicion that one must now approach any and all communications from the Agency, even when signed by the Chair.  NCUA seems to believe that statements which are "half true" will suffice for the full truth - as long as the "half truth" meets the Agency's agenda. 

There are quite a few examples in Ms. Matz' reply to Congress; let's look at just a couple of them...

Monday, June 02, 2014

The Honorable Thing To Do - When An Agency is Failing... (And Yes They Do!)

" #*X!*!#?!, not them again..."

"Mr. President, we may have another "VA-type" mess on our radar..." 

"Looks very similar, Sir - misinformation, lack of responsiveness, indifference to our constituents, regulatory overreach, "damn the facts, Mama knows best attitude".   2000 comment letters from over 500 different business leaders representing all 50 states, every precinct, Mr. President. And, over 75% of the House have already given them notice. We're way behind the curve on this one; it will be hard to claim we hadn't heard, Sir."

"OK, OK, let's move on it !!  Listen, why don't you just send a picture of Shinseki over there and...

Sunday, June 01, 2014

NCUA RBC: Setting A New Standard In Rule Making...

Make that a "robust"
5-year old !!

"A child of five could understand this.  
Go fetch me a child of five."

- Groucho Marx

We all should have known what was coming, when the draft was written with...