Tuesday, July 12, 2016

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


So, we're off to a fast start with a bunch of comments on Part I!  Not sure there was any clear, commentary on whether or not credit unions want and need a separate, independent federal regulator and insurer - do we?  Why? No need going through any kind of analysis, if most folks don't really care - do we? Why?

What about the current NCUA Board - strong or
weak? Why? Again, no need to talk further if you believe the Board hasn't got the chutzpah to recreate and salvage the agency - will they? Why not?

But while we're waiting for you to share your reasoning on those questions, let's take a look at why it is so painfully obvious that NCUA has major problems...



The proof is the failure of corporate credit unions which bankrupted the NCUSIF - right? Nah, wrong! 

 We all need to "get over" the corporate debacle and move on. Despite the fact that NCUA folks literally sat cheek-to-jowl in the headquarters of the larger corporates, approving the risk positions that destroyed the system, most everybody on the planet also "missed" the catastrophe lurking within the financial system.  

Yes, NCUA missed it, but "they" didn't do it on purpose - "they" simply didn't know what "they" were doing.  Most of the NCUA corporate experts are still at the NCUA now in leadership positions - not so with their counterpart corporate execs, they were forced out - and often prosecuted - for their role in the failures.


As we go forward, just remember that "they" are still at NCUA and having escaped "the noose of accountability" should be wise enough and humbled enough not to so publicly and egregiously "mess it up" again - right?

But they did mess it up again and in a very big, ridiculous way! It happened just a year ago...


 It was called the Risk-Based Capital Rule (RBC) - remember?



24 comments:

Rusty said...

You raise a number of good points and questions, Jim. An extreme example of why it's usually not a good idea to turn over management of the farm to bean counters who have never actually grown any beans. In such cases, perhaps the TRS-80 is an appropriate technology level.

Anonymous said...

Close it down, FDIC has better staff and better leadership. Bet you can't find anybody who ranks ncua ahead of FDIC. What do we lose by having a competent regulator.

Sam Whitehurst said...

Because we have politically appointed leadership at both the state and federal level, we need to have a choice. After all, in most cases things just seem to work better when you have a choice. The phrase 'absolute power corrupts absolutely' comes to mind!

Anonymous said...

I think we ought to fight for the NCUA. We are better off with a regulator focused solely on credit unions. We have a new chance with the problem lady out of the chair and off the board (yeah!). Not sure if these two see the mission that is needed. How do you get rid of the arrogance that now exists and was encouraged by the last leadership. Its endemic and starts at the very top of the staff food chain.

Anonymous said...

Don't we need to ask Jim and Dan what we need to do?

Anonymous said...

Hope this dialogue continues.
Has the potential to demonstrate to credit unions that, in the end, the problem is in the mirror..in so many ways.
Let's start with this...
The NCUA board is the strongest in a decade with 2 empty seats and McWatters. And, McW has all but told you it's over. While credit unions have understandably tuned out the trades and NCUA, McW is on record in board meetings saying some pretty interesting stuff that the "co-op" trade papers don't report and CUNA/NAFCU don't tell you about.
Read McW in the September October November board meetings.

NCUA past its sell by date?
"In its current form"?
And therefore, by extension, credit unions? In their current uncooperative way?
Keep the dialogue going, this will be fun!

Anonymous said...

Don't we need to ask Jin and Dan what to do?
And yes ddollar, mica?
Good idea.
How's that worked for you so far?
It's worked real well for them.
How is your CU and its "owners" better?

Anonymous said...

Somebody blamed it on the union yesterday, but it isn't the rank and file examiner that is causing the problems. The dumb stuff comes from higher up and is dumped on us. The leadership isn't in the union so we will support a positive change. We are slowly losing our jobs anyway as the credit unions go away.

Anonymous said...

I think we need to give Mr. Metsger a chance. He really didn't have much choice on how to vote when he was under the thumb of the wicked witch of the east. But he does have the chance to prove if he is a man or a mouse now. His show to lead. No excuses anymore, it is his watch.

Anonymous said...

Wait a minute Dan and Jim could write a "strong letter" to someone. That has been working real well for us

Anonymous said...

Don't think Metsger has the will and McWatters seems to be losing interest. Fear both have very short term time horizons and are already looking to their next assignment. Why do any heavy lifting at NCUA, just coast on out.

William Brooks said...

The system is broken and is failing to succeed at it avowed mission. This is evidenced by the extreme rise of merchants of misery like the payday lenders, check cashers, and title loan operators. Credit unions are have a difficult time transitioning to an Internet world of financial service providers.

It may be time for an Estes Park II to determine if we are a part of the solution to bringing more to those who need financial services?

Anonymous said...

The union comment yesterday was not a hit on the staff; sorry it was not clear. It was suggested as added evidence of the leadership at the top being weak not just outside with RBC etc., but internally as well. Staff acting to unionize can be a clear sign of a leadership group failing to connect with staff. Trees die top down, not bottom up.

Anonymous said...

Hope you'll get around to talking about saving the small credit unions. We are barely hanging on and folks that say it isn't NCUA don't walk in my shoes. They are killing us with silliness and stupidity. We are not a risk to the Fund unless they force us all out of business and then they will be rolled up into the FDIC. NCUA management is leading a going out of business sale which will hurt NCUA workers and all but the mega credit unions.

Anonymous said...

Maybe that's what the Navy size CUs are after, getting rid of the little guy. the mega credit unions don't seem to understand you can become "Too Big To Serve".

Anonymous said...

Credit unions will continue to have NCUA as a regulator and insurer. CUNA and NAFCU would become non-entities if they had to deal with a regulator that also was responsible for the banks in this country. With NCUA they act like they are the top dogs. With a FDIC, Treasury or Comptroller they would be like minnows in an ocean. And Congress is not about to initiate a regulatory change. So you can talk all you want but it ain't gonna happen.

The current NCUA board cannot be judged as qualified,competent or progressive because they have done nothing to be judged on. Chutzpah? You have to be able to spell it to understand what it means. Don't count on both of them being able to do that.

At NCUA, just like at almost every federal government agency, once you are there, you are there forever. Short of being convicted of a felony, you are a lifer.

Nothing is going to happen anytime soon relating to RBC. Certainly not in the life of this board. Don't set your standards too high with Laurel and Hardy because if you do you will be disappointed as you were with the Queen.

Anonymous said...

Will the big changes at CUNA help with all this?

Anonymous said...

I say we all vote for Trump if we really want to do something. Think having McWatters as chair of NCUA might be worth the risk of a The Donald presidency. Metsger is gone in a year and Hilary could bring everyone's worst nightmare back for another six years.

Having said that I may vote for Trump two or three times, which is still permitted up here in NY.

Anonymous said...

The Donald or Matz? I'm with you.

Anonymous said...

We need a North Carolinian on the NCUA Board!

Anonymous said...

Do you actually have to die to vote 3 or 4 times for Trump. I am good with giving him my vote but not the extra if you have to die to vote them. I have some dead relatives that would certainly vote for Trump. They were Republicans so they never learned the voting from the grave trick!

Jim Blaine said...

You have one coming...

Anonymous said...

What coming?

Jim Blaine said...

A nominee for the NCUA Board...

(Don't over think this!!!)