Size Doesn't Matter...

Nice rack!

Least most of us "normal" males hope so!

Probably a good time to stop and address the recurring reader comments which suggest that NCUA's budget should be compared to the budget of the FDIC, based on the asset size of credit unions vs banks examined.

The number of credit unions continues to fall year after year.

WARNING: "ASSETS EXAMINED = EFFICIENCY"

- AIN'T TRUE, DON'T GO THERE!

The thought being that since the FDIC spends substantially less "per dollar of assets examined" than the NCUA, then the NCUA is obviously "bloated, top-heavy, siloed, and inefficient" [to quote Jim Nussle talking about CUNA - btw, whatever happened with that?.]  

Let me suggest that "size truly doesn't matter" - in fact, size generally doesn't matter at all - in capturing the "risk" profile of a credit union.   Regulators examine to monitor the level of "risk" at an institution, not the volume of assets. Actually, it's pretty clear that the larger the credit union, the less likely the CU is to create a loss for the NCUSIF. The Agency's own data proves that fact:

NCUA Board member Mark McWatters has pointed out on several occasions over the last year, that the vast majority of recent NCUSIF losses have arisen from fraud losses at smaller CUs,

where controls and compliance more frequently break down. But, before we "run off half-cocked", do remember that less than 1% of all credit union assets are in credit unions rated "CAMEL 4&5", less than "safe and sound". 

Small and large alike, credit unions pose little risk to the NCUSIF and no risk to the financial fabric of the Nation. But the NCUA is "in a bind" structurally and budget-wise, as the number of credit unions continues to plummet. 

Clearly if NCUA can't  shift the budget dialogue to "asset size = greater risk" then the Agency will have to face the unpleasant task of reducing its budget to reflect the statistical and economic reality that monitoring fewer, larger credit unions in an all electronic, cyber-digital world requires very few staff - and not the staff which the Agency currently employs.

But facing up to the reality that:

Matter Of Fact...

"Things that matter most must never be at the mercy of things that matter least."

- Goethe

NCUA: Requests For Comments FOIA... Part 7.

Guess while we're looking at NCUA's senior staff presumptuousness with FOIA, might as well look at a classic example of why many folks [like Dennis and Bill] suggest its time for credit unions to ask that the NCUSIF be dissolved and merged into the FDIC. [But of course, let NCUA continue as the federal charter regulator and resize to live off its regulatory fee income.]

Let's go back to the NCUA 2016 Chief FOIA Officer Report which we mentioned in "FOIA... Part 6" [here's the link]. This time take a look at # 7. 
     

THE 2015/16 BRAIN TRUST AT NCUA...
ACCOUNTABLE - COMPETENT - TRANSPARENT?

As you will recall, the Chair of NCUA was handed her head in a hand basket at the infamous July, 2015 House Financial Services Committee hearing. Never has a performance by an NCUA official done so much to diminish so profoundly the reputation of the Agency - and all credit unions! The Chair is now gone and credit unions are very fortunate (cross your fingers for the future!) to still be around.

The crux of that hearing was the painfully proved

fact that NCUA - with  NCUA OGC complicity -  inappropriately redacted - using FOIA as an excuse - comments from a PriceWatterhouseCoopers report which simply suggested that NCUA improve its methodology and transparency in calculating the NCUSIF overhead transfer rate (OTR). [That idea was not exactly a "trade secret" to anyone familiar with the Agency!] 

How did NCUA justify substantially redacting that 2011 PWC report?

NCUA: Request for FOIA Comments... Part 6.

THE FREEDOM OF INFORMATION ACT

(FOIA)

AS ADMINISTERED BY THE NCUA IS PRESUMPTUOUS,

... IN THE WORST SENSE OF THE WORD!

Let me give you an example. Why don't you check out the official 2016 NCUA Chief FOIA Officer Report (for calendar year 2015) [here's the link]. Take a look in particular at item # 4. 

First before we proceed, you should understand three concepts: 1) the FOIA defines eight specific categories of information which are exempt from disclosure - all else should be published - [here's the list: see 792.11, particularly #8],  2) the FOIA provides the NCUA with broad discretionary authority to release or not release information even that falls within those eight exemptions, and 3) the FOIA anticipates "the presumption of openness".  

Congress and the President have encouraged the NCUA (and other departments and agencies) to use a "presumption of openness" when considering whether or not to publish information. In other words, the right of the people to know should be paramount. 

NCUA claims to follow this mandate on openness (see # 4 in the Chief Officer's Report): "NCUA follows the Attorney General's FOIA Guidelines encouraging agencies to make discretionary disclosures when information technically falls within an exemption... The Chief FOIA makes the determination if discretionary release is appropriate, after considering the applicable interests and determining the interests served by disclosure outweigh other relevant interests."

Also take a look at the expectations of the U.S. Department of Justice as to how the "presumption of openness" is to be interpreted and implemented; [Here's the link - scroll down to the "Summary"]. Pretty clear - "What can I release?"; ".. not withheld merely because they fall within an exemption"; "... make discretionary releases of records when possible."; "... strive to make partial disclosure." - isn't it?

Do you think the following NCUA FOIA response meets that spirit of

 "presumption of openness"?

... or is simply presumptuous?

ACCOUNTABILITY - COMPETENCY - TRANSPARENCY 

NCUA: Requests For Comment On FOIA... Part 5.

Lots of folks believe that reform at the NCUA is a pipe dream, just not possible. But with the prospect of a new Chair, personally I still have great hopes for fundamental, positive changes at the Agency - and soon! The changes required, however, are not incremental tweaks, they are a complete "about face" in terms of [you guessed it!] accountability, competency, and transparency.

In "FOIA... Part 4" offered up an easy test for the current NCUA Board leadership to demonstrate its commitment to a new day at NCUA - simply tell credit unions and the American public what internal changes were made at the Agency to prevent the repeated misuse of FOIA by the NCUA staff  [here's the link] as acknowledged under oath at the House Financial Services Committee on July 23, 2015.

Here's a description from the FDIC leadership of why reestablishing trust at the NCUA is so important. While Mr. Hoenig is chastising our friends over in the banking industry... the same "reputational damage" has occurred - and continues to exist - at the NCUA:

"In a stern critique of the banking industry, FDIC board member Thomas Hoenig said in a recent speech that bankers do not fully appreciate the public's rebuke of the industry.  "It is alarming that some CEOs of some financial firms fail to grasp why they are trusted so little nor appreciate the reputational damage they caused their industry.  

B-oink! B-oink!

They acknowledge very little offense in taking a public subsidy and squandering it in a series of actions that place billions of taxpayer dollars at risk."                                             

Can you think of any  "offensive" billion dollar squandering that has occurred at the NCUA, that has opened them to "public rebuke"? 

Rants And Raves…. Hot Off The Press!

IN THE LOCAL NEWS:

Fat chance !

*  Still hoping that the police in Bakersville can step away from the donut box long enough to enforce some traffic laws.

*  God will judge step-mothers.

*  January is National Train Your Dog Month. Just sayin'.

*  When you see a political ad on TV you might as well consider it a lie, it most likely is.

* Crisp's Asphalt Paving Co. - Now Offering Hot Crack Sealing! Free Estimates.

*  If you're gonna be low down enough to steal from other people, try not to let anyone see you.


*  Some of the people who move here think that folks whose families have lived here for years aren't near as smart as them. Well least we were smart enough to get here first.

And the "you'll only find this sort of quality put down moment" in a hometown newspaper...

Send In The Clowns...

"If you don't run your own life, somebody else will."

- John Atkinson

NCUA: Requests For Comment on FOIA... Part 4.

Hope you will take a look at the comment submitted on "NCUA FOIA... Part 3" of this series [here's the link], it poses some appropriate questions: "What's the problem with NCUA FOIA? What information are you not receiving that you asked for? Define the issue!"

In response, I would ask you to review the post below, which is a recap of Congressional testimony given by the Chair of NCUA last year on the use of FOIA at the Agency. [simply play the video if you have doubts!] 

"What's the problem with NCUA FOIA?" You mean other than the admitted misuse of FOIA by NCUA, the admitted lack of internal review and controls at NCUA over the use of FOIA, the admitted involvement of the NCUA OGC in the misuse of FOIA, the admitted "cluelessness" of the Board Chair (and presumably the entire NCUA Board) on the misuse of FOIA, and the shaming of the entire credit union movement by the admitted mockery and disdain of FOIA by the NCUA? 

"Define the issue?" The issue is not FOIA; the issue is the NCUA.  And its repeated, egregious lack of...

ACCOUNTABILITY - COMPETENCY - TRANSPARENCY    

HERE'S THE PRIOR POST:

[The testimony was before the House Financial Services Committee on July 23, 2015]

Oh! Gee! See...

Would someone please ask NCUA's General Counsel (OGC), preferably under oath, why he felt it necessary to redact the Executive Summary of the 2011 PriceWaterhouseCoopers (PWC) study of the Overhead Transfer Rate? Was it bad law or just bad judgment? Assume the OGC agrees with his boss, the NCUA Chair, that he didn't know what he was doing.

Not trying to be harsh. In some important positions, you are entitled to make repeated mistakes. Can't think of any right off hand, but anyway...  Just following up on what Chair Matz told the House Financial Services Committee, under oath. Here take a look for yourself:

[... it starts at @ minute 2:40]

Or here follow the purple duck...

In Full Support of the American Bankers' Association...

"If you act like a bank, you should be treated like a bank."

- the ABA on Credit Unions

Finding that to be a profoundly acute, philosophical statement, I would go further and add...

Mama Told Me Not To...

A RUDE AWAKENING FOR MANY !

ANNO DOMINI 2017...

HAPPY NEW YEAR!