Ms. Gretchen Morgenson is a much heralded, business columnist for the New York Times. In her writing, she generally "tells it like it is" and doesn't suffer fools - or foolishness - very lightly.
Her Sunday column (Nov. 23, 2014) was about "regulatory capture"; a topic made infamous last week when the NCUA manufactured "that threat" as their excuse for using an old KBG playbook to run the Agency (Here are Chair Matz' video remarks at CUTimes - take a look for yourself).
Of course, Ms. Morgensen was writing about the Fed, not the NCUA. The New York Fed has come under sharp criticism for being too close to the major Wall Street banks - i.e., regulatory capture. Three short paragraphs 1) stated the core problem, 2) suggested a solution, and 3) outlined why the change was necessary.
1) CORE PROBLEM: "The Federal Reserve Board prefers to operate in a shroud of secrecy, and its officials really don't like having to answer to anybody."
2) SOLUTION: "Investors would benefit from greater disclosures by the Fed... The Fed, for example, reveals only final results of its "stress tests" that measure banks' health. If you required it to disclose those models, you would facilitate cross-bank comparisons ... You'd also create incentives for the banks to disclose more and more about their own models."
3) AND, WHY...: "There is another benefit to increasing transparency at the Fed. It would be a singularly powerful force against regulatory capture."
Think the NCUA will take this opportunity to be creative, lead the way, set a new standard of professional regulatory excellence....
DON'T HOLD YOUR....
... suspect NCUA "officials really don't like having to answer to anyone."
3 comments:
Ms. Matz's comments about regulatory capture clearly indicates her lack of appreciation of the unique difference between banks and credit unions. The credit unions are designed to be pure intermediaries. The volunteers who control the credit unions have no vested interest in the out come! Ms. Matz is using a politically correct talking point concerning banks that she does not realize are not going to work in credit unions. Actually, NCUA should embrace the concept that they are an integral part of the credit union system whose goal is single purpose and that is making more available to those of limited needs. Are there bad actor in the credit unions system? Yes! However, there is no way NCUA will promptly identify them as long as they are positioning themselves as bank regulator wannabes! They have bank style examination procedures that are not generally relevant in most credit unions. This is like the TSA strip searching grandma at the airport. They have done something, just not much!
Famous quotes heard in halls of NCUA:
"I answer to no one".
"While I am Chairman, I will determine what does or does not happen".
"Transparency is in the eyes of the beholder and I am the beholder".
"I take exception to anyone who takes exception to me".
"I was put here to do a job and I am doing a job on credit unions".
"They talk, I listen. I talk, they had better listen".
"So whet if we are late in what we do, they cannot fine us".
"My way or no way".
"I know what is best".
"They will miss me when I am gone".
Methinks the best example of "regulatory capture" in CU land is still the NCUA "resident examiners" in the now-failed corporate CUs.
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