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| Draw your own Conclusion! |
Chair Matz continues to harp (incorrectly!) on "the threat" posed by larger credit unions, while Mr. McWatters suggests that NCUA should focus on the facts, which clearly indicate that most fraud losses arise in smaller credit unions. Facts and actual data have, of late, been considered as little more that an "inconvenience" by the current NCUA leadership, - especially when the facts conflict with the narrow-minded biases of NCUA's entrenched "ridiculocracy".
Here's a "reprint" from earlier this year which shows that Mr. McWatters is right.... LARGER CUs ARE NOT THE PROBLEM AT NCUA:
ACCORDING TO:
The NCUA Report
September 2013
"The [2008 financial] crisis showed that credit unions and regulators must be forward-looking and identify emerging risks sooner. For example, credit unions cannot simply reach for higher yields without considering long-term consequences."
"This is why NCUA issued a rule requiring credit unions to plan for interest rate risk and why we proposed allowing qualified credit unions to use derivatives to manage that risk. We also created the Office of National Examinations and Supervision [the "ONES"] to focus on credit unions that pose the largest risks to the Share Insurance Fund."
WELL, THE RESULTS ARE IN BOYS AND GIRLS:
EVERY ONE OF THE 25 LARGEST CREDIT UNIONS IS WELL-CAPITALIZED!!
(As Naked Capitalism blogger Yves Smith would say: "Quelle surprise!")
NCUA's focus on credit unions with assets greater than $1 billion as "risky" has always flown in the face of the facts and NCUA's own actual history of losses from failing credit unions.
Again for the record, that credit unions in this category pose "the largest risk" to the NCUSIF just because of their size is "robustly" delusional and falls victim to the classic analytical mistake of confusing size with risk.
So let's do the geography, political risk analogy one more time.....
Based upon NCUA"s robust...
"SIZE = RISK" Theory,
The U.S. invaded the wrong country in 2001. After all Afghanistan is a country with a land area of only 250,000 square miles.
Clearly if "SIZE = RISK" then the U.S. should have invaded...
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| CANADA !!! (which has 3,850,000 square miles.) Hopefully, no one believes that our sizable neighbor to the north is "the largest risk" to the safety and soundness of the U.S. of A.! |
(Heh!?)
3 comments:
I find it hard to believe that Matz took issue with McWatter's comment on credit union fraud. Her own CFO confirmed that almost every loss to the fund this year was the result of fraudulent activity and the Chairman "begs to differ". Rather than being confrontational she should adopt an attitude of listening to what other board members may have to say. After all, NCUA is not a monarchy run by a Queen. Or is it?
The hope is that very few will look at the facts which seems to be the new norm nowadays. Little Credit Unions = little problems and Big Credit Unions = Big problems doesn't that make perfect sense and a great argument to add another layer of bureaucrats and maybe just maybe get a new building. More importantly use the same argument to "prove" how important we are. Where were credit unions hit? In the buttocks sir! Ouch most never saw it coming!!
What about the third person on the board? Is he just going to sit there and and not stand up for credit unions? He touts he was a credit union director. Was he mute then too?
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