Monday, July 11, 2016

NCUA: An Agency at the Crossroads?... Part I

What would you do if you discovered that the administration and teachers in your public school system were not qualified or not appropriately trained to teach your kids the skills they will need in the 21st Century - endangering the future of your children?   

Or that the doctors in your local hospital were not keeping up with advances in medical technology, or the break-throughs in bio-pharma therapies - resulting in the untimely death of many
patients?  Or that your local government was still using a 1970's "legacy", Tandy-TRS 80 computer, with a dial-up modem to compute your water & sewer rates and to create your tax bills - creating uncertainty as to the reliability and fairness of the assessments? Or that the rulings of your local district court seemed to favor "personal peeve & politics" over the rule of law - resulting in severe losses of public support & credibility, and with no clear, fair source available for appeal & redress? 

And most importantly, what if there were no credible, internal control standards, nor effective external,  "market-based" benchmarks in-place to monitor, measure, and report on the performance of these important services...
 What would you do?

As you've noted from the title of this post, this is
not a hypothetical exercise.  We want to take a specific look at the NCUA, as to whether or not the Agency is "at the crossroads" in terms of a need for dramatic, critical change to assure its future - Why do this now?

Four reasons:

1. Credit unions need a strong, independent federal regulator & insurer - and should fight to create one.
2.  NCUA now has the strongest and most capable Board it has had in the last decade - operating with an open mind.
3.  NCUA will not be permitted to continue its backward-looking, "shoot-from-the-hip" regulatory missteps - by either credit unions, Congress, nor the real world marketplace.
4.  This won't wait. NCUA has a very short "shelf-life" as it now operates - hopefully not already beyond its "sell by" date. 

So, before we look at "What would you do?", it seems reasonable to establish "WHY" something needs to be done.  Too often it is easy to assume that grousing about the NCUA is simply whining or anti-regulatory rhetoric. Can it be clearly demonstrated that there is a serious deficit in the existing training, expertise, systems and senior leadership at NCUA required to help take credit unions into the future?

I think so and the best place to start is with the recent risk-based capital (RBC) rule - the incapability of NCUA on display before the entire world...

But before we start , do you agree with the "Four Reasons"?


Anonymous said...

A leopard can't change its spots. Poor leadership over the last decade at Staff and Board levels, too far gone.

Anonymous said...

Not sure why you would think this is a strong board?

Anonymous said...

You don't have to prove anything about the incompetence of NCUA. Its spelled C-O-R-P-O-R-A-T-E-S!

Anonymous said...

First of all I think everyone would agree that even if Jesus Christ or Mother Theresa was on the NCUA board someone would complain about their incompetence or inability to get things done. That is just the credit union way.

Schools and now our health care is controlled by our government which means things will only get worse before they get better. And try as you may, not a lot will change.

So let's get to NCUA since your preamble was a lead in discuss the problems that exist there.

1. Credit unions already have and independent regulator free of any real oversight. Your past Chairman always reminder everyone of that and even told Congress to bud out. So what are you fighting for now?

2. Strong, capable board? Really? Talk is cheap and that is all you have gotten. Promises, promises. Action is what you want and you think you have seen that? Perhaps you need a second cup of coffee.

3. Come on Jim. No one is really rocking the boat. CUNA? NAFCU? Congress? Credit unions? All you are getting from them is the same blah blah blah you are getting from the "capable" board.

4. Even if you add another product to what's on the shelf there is no leadership to produce any results. You got two bananas and we know how quick they ripen and need to be tossed.

RBC is too heavy a load for the lightweights you hold in such high esteem. Let's start with an easier one like examinations. One would think we do not need to put Einstein on the board to get that one done.

William Brooks said...

The problem with NCUA is that they suffer from what I call: "My Great Aunt Emma Syndrome." I had a Great Aunt Emma. She never had children. Growing up she would pontificate at length on her theories of child rearing. As a child I thought she had the wisdom of the ages when it came to raising children. When I was told to expect my first, I was confident that it would be a snap because I remember all of Great Aunt Emma's bromides concerning raising children. Pretty much on day one I tossed Great Aunt Emma's rules out the window. Reality trumped conjecture!

I can say with certainty that Examiners when the leave the Agency to run a credit union pretty much universally agree that the things that they attempted to enforce as an Examiner did not work as a CEO. NCUA suffers from a real lack of worldly experience. Hence we have confrontation when credit union reality meets NCUA conjecture.

Anonymous said...

Senior staff is best argument you can find against inbreeding. Credit unions and the real world are getting more sophisticated, NCUA isn't keeping up, doesn't have the staff leadership who knows how to move the ball forward in fast paced world. Doesn't have the ability or may just not care. As said above not much glory for a professional regulator to look forward. Only reactionaries and always after the problem has occurred.

Anonymous said...

Wouldn't want my kid to seek a career at NCUA. Its their reputation not the work.

Anonymous said...

Foolhardy if you think you'll find any innovative leaders in a government bureaucracy. Not any entrepreneurs in federal government. NCUA guys are after high pay and no job risk and they've got it. They rock the boat, they got no where to go. Good luck sucker, if you think a "strong" Board can change that.

Anonymous said...

Their employees unionized. A leadership issue?

Anonymous said...

Rank and file examiners are not where the problem lies, they have to put up with the crap too. Ask them how their performance is measured. It's a joke. Whole system is a sham.

Worth hiring an attorney every time NCUA schedules an exit interview.

Anonymous said...

Roger all this on West Coast.

Anonymous said...

I vote weak staff and weak board.