Thursday, March 13, 2014

Clubbing Baby Seals....

On very thin ice...
The majority of credit unions in the United States are smaller in terms of assets, but small credit unions "punch well above their weight" in terms of member impact and community importance.  Every credit union was created for a purpose, rarely did that original purpose have anything to do with "growth"

With small credit unions representing over one half of the raison d'ĂȘtre for the existence of the NCUA, let's take a look at how the Agency is doing in nourishing the heart and soul of our movement...

  • Office of Small Credit Union Initiatives(OSCUI)
  • The Resource Center
  • The CU Connection
  • The Partnership Connection
  • The Training Connection
  • Secondary Capital Program
  • Community Development Revolving Fund
  • ... and more!  NCUA's been working hard on this issue!

      With Record Results:  Number of CUs less than $10 million in assets...

    Clearly another "robust" effort!
    • 2004 - 4,255
    • 2005 - 4,020
    • 2006 - 3,805
    • 2007 - 3,500
    • 2008 - 3.274
    • 2009 - 2,944
    • 2010 - 2,781
    • 2011 - 2,572
    • 2012 - 2,348
    • 2013 - 2,181
              .... seems to be a trend line shaping up here... 0 for 10…. down 2100+ ! Another fine example of consistent planning = consistent results at the NCUA!   ("ERM" - Entirely Ridiculous Management.) 

    Would you continue to run programs in your credit union which produced such an obvious record of failure over a decade?  If you had this type of record at your credit union, wouldn't your desperately inexperienced - yet foolishly smug - "examiner" be slapping you around with DORs, demands for expense cuts, and threats of LUAs?

    Director intimidation, examiner condescension, and adversarial regulations do not seem to be working so well. But the Agency remains unaccountable, "unappealable" and, once again, demonstrably inept.


    We're in the midst of an "CU ecological" meltdown….




    Anonymous said...

    I am from the government and I am here to help!

    Anonymous said...

    Old fashioned hazing and bullying of small credit unions by small minded people.

    Anonymous said...

    While there is nothing I enjoy more than laughing at the idiosyncrasies of the NCUA Examination program, I find the fault not just with them but also the larger credit union who allowed this situation to develop. they should to carry some of the blame.

    Credit unions have a simple mission and that is to intermediate loans from savers with a common bond to borrowers of modest means. Pre-1980's small credit unions could arrange for a loan on a single document. Today it takes pounds of paperwork to make a simple signature loan. Not to mention how complex it is to have the member join the credit union. This does not include the mind numbing requirements of BSA and ALM for small credit unions.
    The Navy and SECU type credit unions fain outrage with the regulatory burden imposed buy NCUA and the CFPB but they know that they have legions of lawyers to assists with the compliance burden.
    The smaller credit unions are faced with an impossible situation caused by onerous regulatory burdens to correct problems that small credit unions have nothing to do with. The consequence of the regulatory insanity is a loss of obtainable low cost credit to credit union members of modest means. No one seems to see the irony of pawn shops expanding like weeds in a garden, even getting agreeable presentation on reality TV, and small credit unions
    closing down.

    44Rp said...

    This situation is bad enough. What makes it harder to take is that the larger CUs subsidizing this mess have paid insane amounts that increase each year as part of their operating fee in order to make this thing work. Your charts and graphs illustrate that this is clearly not working. The cost of the bloated NCUA administration sucks more and more out of the system and puts less and less back in. Unfortunately just a small part of an even bigger problem that is our government.
    The good thing is that a light can be pointed at this small part and maybe at some point there will be accountability and improvement.

    Thanks for shining that light.

    Dennis Moriarity said...

    The numbers are bleak. I am not ready to lay the blame entirely at NCUA's doorstep. I think that Regulators don't necessarily have an obligation to be a champion of those they regulate. While there is a purpose in their role I think they overstep that purposeful role consistently, by writing lots of stuff they shouldn't, then forcing the regulated to adhere to their view of how “the world turns”. RAP can also be crap. A lot of times its just more bulls__t bureaucracy building or what I like to refer to as the three b's of government. Jefferson put it more politely by saying “Stop the Government from wasting the labors of the people under the pretense of caring for them”.

    In this particular case I think the more responsible (or irresponsible parties) are the Trades. They have a clearer, more specific responsibility and your recap of the year to year declines point out their ineffectiveness in fulfilling that responsibility. Then again when your comp and benefits near a couple million a year who could blame you for ignoring those little creatures I mean with golf tournaments and junketing taking up so much of your busy schedules.

    I'm not a fan of NCUA writing drivel and foisting it on the governed. It is, at least in my mind, not a way to run a railroad. Matz bitches about late filings but the constant demand for more information and everchanging informational minutia make the piece of crap program called 5300 harder to keep up with every quarter. I guess they recognized that by giving us a little more time to respond. Following that up with threats is the way our “New Government” likes to rule I guess.

    The direct responsibility for improving the operating environment is with the Trades. The factors that have caused such declines is in large part “owned” by NCUA not being vigorously opposed by the trades. By vigorous I mean spending some time in a courthouse forcing them to explain why they can write a rule but then throw it out and in the end dictate how it will be applied. Oh I know Congress made us do it but there still are 3 branches of government maybe as checks and balances you think.