Thursday, July 14, 2016

NCUA: An Agency at the Crossroads... Part IV

Man, we've really got to pick up the pace; we're just spinning! But let's go forward by backing up for a minute - OK?

First, we set out in Part I to try to answer two or three questions: 1) Is NCUA worth fighting for?, 2) Is the NCUA Board up to the task of reforming the agency?, and 3) How can you demonstrate that the Agency needs a diaper change - and not from "the bottom" up!?

The thinking was that we had to prove question #3 "beyond the shadow of doubt" if we ever hoped to have an intelligent debate and serious discussions about what Agency reform should look like and "why".

Just for the record, I believe credit unions do need an independent regulator and that the NCUA Board is up to the task ... and that "the right time" for reform is right now!

So, proving the # 3 question is why we are taking a long, hard look at how the senior staff at NCUA tried to drive a seriously flawed, "Lala land" RBC rule down the throats of America's credit unions - much to the disbelief and disgust of all involved.

Are you with me so far....?

The end result of NCUA Basel-ball was that after almost two years
of expensive, reputation shattering struggle by the entire credit union industry; a defiant, recalcitrant NCUA staff was forced to recant its painfully public stab at regulatory idiocy and a final RBC rule - in line with national and international standards - was finally adopted on October 15, 2015.... two years of unnecessary embarrassment at great cost, while NCUA publicly pranced center stage, under the glare of the harsh-reality spotlights up on Capitol Hill.

Every knowledgeable participant in the financial arena who watched this battle to get the NCUA senior staff to do what was appropriate, to do what had been thoroughly debated, researched, and vetted by global regulatory experts over the prior 25 years knew, NCUA lacked professional depth... a high risk problem for everyone connected with credit unions in the current "take no prisoners" political and public policy environment.

Tomorrow we take a look at why it may be time for the coach to call a time-out and walk out to the mound...



Anonymous said...

No doubt that Ncua has a weak bench. After training 12 different e-i-c's over the last 20 years will confirm that Ncua does have a strong and deep "bull" pen.

Anonymous said...

Well, the dialogue picks up in intensity as get closer to "accountability".
Guess that's why they call it accountability.
And, in the "movement" there has been and is none, on a system wide basis.
Individually, there is individual accountability.
Easy to spot.
The current and former managements and boards at successful credit unions held themselves accountable by, in various ways, asking and delivering on..."what's right for the members NEEDS TO BE the mission but WE THE CU need to grow from those efforts".
Lack of scale is NOT an option.
Just ask the thousands of "small" banks and credit unions that are now "gone"...and the thousands of small current that are struggling.
NCUA held accountable....
...that's your Dallas here correct?
Congress, wake up bc that's your "tool".
Will credit unions rally "around" the trade associations and go straight to Congress for the big push?
Clearly waiting for Nafcu and CUNA has been a money pit.
Enjoy the debate!

Anonymous said...

Spell check a killer.
"Dallas" meant to be focus.
The focus is on a better independent regulator.
Credit unions are recognizing as many Americans are recognizing, that the guys they pay to "have their" back ...DONT.

CUNA, Nafcu, congress, leagues, ABA, Icba, they collect our money and COUNT on us not holding them accountable, while they count and spend our money.

Good system for them.
BAD for the rest.
CUs will get nothing from congress until they pay taxes.

Anonymous said...

Reality check time and direct answers to the questions laid out by Swami Blaine.

1. NCUA is going nowhere. It will remain structured as it is with a three member board not five.

2. The two M & M's remaining on the current board will not in any way reform the agency. The Big M is too busy wondering what will happen come January. Will he still be the Big M or again be relegated to picking up the pieces. Since his term is up in 2017, how quickly will his replacement be appointed? And where does he go from DC. With so much on his mind how could he possibly think of agency reform. The Little M does not know if he is staying or being shipped out. Most believe his nomination to the I/E Bank is headed nowhere. But what if Chairman Shelby and Leader McConnell get something they really want? It could be bye bye Little M.

3. There is no need to demonstrate the agency needs a diaper change.It does. But I refer you to number 2 above. Neither of the two boys have it in them to put the new diaper on. They either don't know how or are afraid of the smell when they take the old one off.

Anonymous said...

... and the NCUA "bull" pen is without question located in left field. Mostly softball or t-ball players.

Anonymous said...

Using your baseball analogy, the movie now playing at NCUA is "Field of Screams".

Anonymous said...

Is there a message being sent to credit unions with the Herrera announcement?
If so, what is the message?

What's the reason for the portrait of the Supreme Court accompanying this latest post, Mr. Blaine?

Doesn't look like anyone is "home" on the accountability idea for NCUA.

William Brooks said...

The lack of accountability is the glaring problem with the senior staff. They have one focus and that is to not have an losses on their watch. Even though they still get promotions and bonuses when they fail, they are all stress out about any credit union that posses a threat to their security blanket.

The call for more capital is not looked upon as a bad thing even though credit union members pay the price in form of higher costs. Why worry when more capital protects their job security. It is really not their place to be concerned about credit unions failing and members being forced to high cost alternative financial arrangement.

If an agreed correction to a problem because NCUA forced the resolution fails, there should be some accountability to the NCUA. Currently, only the credit union staff take the hit.

NCUA Senior staff gets to play the game with no skin in it. Great work if you can get it.