Wednesday, November 30, 2016

Want To Save A Quick $5 to $25 Million+...?

Not much help...
If you read the comments that were proposed on the NCUA budget, then you know that the Board found little that was instructive or helpful.  But, it was a great, positive transparency move by Chair Metsger to offer the opportunity! Thank you!

We do all now know that the NCUA Board will have to confront and solve a riddle that includes five key elements: 1) a shrinking, consolidating industry, 2) a budget dominated by personnel costs, 3) a shift from "people-based" to technology-based regulatory monitoring/analysis, 4) an existing staff without the requisite skill sets for the future, and 5) a labor union which must work with the Board to redefine NCUA jobs for the future. A very tough challenge!

But in the short run, if the NCUA Board would like to save an easy $5 million+ bucks annually...  

... simply drop the stress-testing and "capital planning" review required of those CU's over $10 billion in assets. 

It is not required by law nor regulation and NCUA is paying $5 million annually to outside consultants (Blackrock) do perform the analyses - that would be a $25 million+ savings over the 5 year budget cycle!). NCUA senior staff acknowledges - very accurately and truthfully! - that they don't have the technical ability to perform these analyses!

Daniel Tarullo at the Fed, Barney Frank of Dodd-Frank fame, Jeb Hensarling in Congress, etc, etc all have agreed that the minimum asset hurdle for this exercise should have been set at $250 billion+.

The NCUA Board could independently act on 
You can do it!
this budget savings at its December board meeting - and save $25 million to be used to retrain its own staff appropriately [NTEU are you paying attention?] to do this type of analysis in house in the future.
Would be a nice $25 million X-mas present for CUs!

[You said you wanted some real budget advice!... so ACT!]

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