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:
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| "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:
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| "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...
12 comments:
Disgraceful!
How many Robusterians does it take to change a light bulb?
Not sure with all the information available and limited real work for a blotted regulatory staff, that the Robusterians could clearly identify and quantify the level of real interest rate risk in the credit union system.
Truth be known is that very few natural person credit unions fail because of the Robusterian's favorite boogie man interest rate risk. If rates rise, some credit union performance may be limited in the short run, but long term problems just do not exist. Asset liability mismatches produce nothing more than the effects of person getting a cold. Catastrophic issues proclaimed by the Robusterian choir on Duke Street happen, only happen when NCUA tries to treat the cold!
With all the information about individual credit unions that Robusterians collect,identifying the few credit unions that may be of concern should be easy to account and quantify. Willing to bet there are a few credit unions with misguided investment programs. However, the percentage of assets in relation to the system is just not material.
Ms. Denise Quiote Matz and her trusted servant Sancho Worth are tilting at windmills!
Credit unions are meeting the challenges of the low interest rate environment while Ms. Matz seems to be playing a part in Waiting for Godot with her countless and in vain rants on the potential interest rate rises. The Federal Reserve has been unable to predict when rates will rise. The EU has taken aggressive steps to attempt to fight deflation. The Robusterians of NCUA have no clue if there is actually a real problem but choose a Chicken Little approach to regulatory action.
Suspect the average duration of the assets most natural person credit unions is less than 4 years. The Robusterians at NCUA need to meet and deal with the few credit unions that have inappropriate levels of interest rate risks. Credit unions should be demanding the facts that Ms. Matz used to make her assertions. Guess Robusterians never have to support their ravings with facts?
Karma is a *#%€¥! Bet there's an audience for this. I wonder if the usual admonitions will come forth-you know the tried but untrue. Per NCUA, "this is a risk to the insurance fund" or this will "cause a run on credit unions". Seems as if they don't even have their own audience. It is evident, however, that certain members of Congress are becoming an audience. I hope they saw this NCUA performance and will close the curtain on this farce.
Matz and her staff are just playing with fire now and trying their best to defend the risk based capital rule. She is making the entire industry look terrible because she cannot admit this rule is so wrong and being done at the wrong time. If I hear Matz speak about her modern regulatory initiatives any more I am going to get ill. I hate to break it to the Chairman this rule is so bad wake up and admit that you and your staff got it wrong. Oh but wait she cannot to that because her ego gets in the way.
JIm this is another example of what a terrible Chairman we have to actually try to do harm to an industry so she can be made to look good. Our worst enemy is the NCUA right now. They are out of control we need hold their feet to the fire and if necessary have her called to testify. We cannot let Matz and her staff can get away with it they will. Matz has actually done more harm than good to our industry those of us out here cannot wait until she is gone but until then we should all unite and challenge them every step of the way. Accountability.
Ms. Matz makes me long for the good old days of Norm D'Amours!
From C-grade students come half-baked (pun intended) plans.
FICUs are nearing the tipping point that either voluntary liquidation or private share insurance are the fiduciary-responsible options.
Any privately-insured CUs looking to take in a "Fed"-up FCU?
Howard Beale
Either Ms.Matz or her staff have failed to properly examine, monitor or instruct those credit unions that have interest rate risk. Her remarks indicate that rather than doing that, she would prefer to paint the entire industry as being clueless on risk. Let's hope she has heard the credit union response and is "listening"
Easy on us "C-grade students", Howard!
I spy a North Carolina NCUSIF insured credit union with a: Supervisory Interest Rate Risk Threshold / Net Worth 593.08% I bet they must pose a real threat to the health and safety of the NCUSIFund.
Take 'em to the shed and beat 'em down!
Lets face it Matz does not know how to lead and it is such a joke that the agency compares itself to the FDIC. The FDIC Chairman and staff runs circles around what we have with the NCUA. And the listening sessions are just being held for the optics. Everyone knows Matz cannot do or say a thing that is not scripted out for her thats the biggest joke in the industry. Blaine what can we all do politically or legally to get this rule withdrawn.
For those of you unfamiliar with NCUA's Supervisory Interest Rate Risk Threshold (SIRRT) ratio, check out the blog posts of 3/27/13, 4/2/13, and 4/5/13 to become enlightened or perhaps that should be "to become inflamed"...
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