Saturday, August 27, 2016

Are You "Listening" ....?

Q:  Did the CU regulatory system fail in 2009?  (Think we all can answer that one!)

Q:  What precisely were the reasons the credit union regulatory system failed?

Q:  Why did the credit union regulatory system fail to anticipate the problems which arose?

Q:  Who was responsible for the failure of the credit union regulatory system?

Humpty Dumpty sat and sat and s...
Q:  Just how costly was that failure to credit unions?

Q:  Exactly what has been changed within the credit union regulatory system to prevent a reoccurrence?

Q:  Significant organizational, governance, and personnel changes do not appear to have been made.  Why wasn't a major overhaul of the credit union regulatory system implemented, given the massive extent of the failure?

Q:  Why should credit unions have faith that the very same regulatory system, the same leadership, and the same lack of foresight which failed so thoroughly in the past, will not produce the same results in the future? 

Hump Time!
(Dump Time?)

.... are you "listening"? 

( If so, then get off your "egg"!)  


Anonymous said...

Q: How costly?

A: The give, the take, the keep and the reach.

The Give: The regulatory system is not helping the cost structure of credit unions. Operating cost per member has steadily increased every year, over the past 10 years. In 2006, the cost of a credit union membership was $277 (non-interest expense per member, excluding loan loss provision and assessments). Last year, it was $359. That’s a 30% increase over that time span. Members are giving more to subsidize credit union operations. At least this is not increasing as fast as health care costs.

The Take. Total net revenue taken from members has increased every year, over the past ten years (net interest income plus non-interest income, excluding provision and extraordinary items). Credit unions took $369 per member in 2006. Last year, it was $481 per member. This too, is a 30% increase over the time span. Could it be a sign of more participation per member? Maybe, but the goal is to take as little from members as necessary, and membership is only up 21% over the past ten years (if you can trust that number to begin with).

The Keep. By regulation, credit unions must keep what is taken from members in the form of net worth. Net worth per member in 2006 was $982. Last year, it was $1,303.

The Reach. Due to higher operating costs and net worth requirements, which are enforced at levels higher than required, credit unions have to reach, in order to take more revenue from members. More reach invites more risk.

Interested in your thoughts.

Signed: California Condor (drastic actions saved me from extinction)

Anonymous said...

You don't have to look far to answer any of the questions posed and if you don't know the answers, you never will.

Anonymous said...

Thought you said the new and improved NCUA board would make things better.
Best board in years.
This board has the losses of medallion loans on its hands...perhaps as epic in some ways as the corporates!
We better get humple to write a white paper...yes that's it..let's visit the wizard, the wonderful wizard of bong.