Happy Halloween...!!

"I USE TO SCARE CREDIT UNIONS ON HALLOWEEN WITH THIS...

BOO !!

... BUT NOW I USE THIS...

Rants and Raves...

Mitchell News-Journal
www.mitchellnews.com

*  I'm a person of faith, but I have no patience.

*  Webb Funeral Home serving the community since 1925, with only the best at a lower cost.  Budget plans  available.  Pay as you go!

*  We're Ebola ready for you, but more volunteers are needed! 

*  Gay folks can get married, but we all have free will.  God don't change, we do.

*  Saw where those Islamic jihadi suicide bombers are promised 73 virgins in Heaven; what does Allah promise to the virgins?  My wife told me to ask.

And this week's "run that by me one more time" classic....

Big Mc ?....

Mc matters ?
We all hope so!

Well !!  Seems we may finally have a "new sheriff in town" down on Duke Street, Alexandria! As you probably know, new NCUA Board member Mr. Mark McWatters is off to a fast, positive start - after just one meeting!

And, the buzz of hope and optimism is palpable within the credit union community - east, west, north, south, large and small.  Many who had "given up" on the NCUA, once again have their fingers crossed, hoping for a prophet of strength and character "to lead us up out of Egypt". The timing could not be better, nor more crucial for the credit union movement.

Not again !!

For those who may have come in late, the first "scene" occurred during a perverse little exchange at the last NCUA Board meeting, when Mr. McWatters simply called for a fresh look at the mounting fraud losses being experienced by the NCUSIF. Innocent enough, pretty sound advice. But the Chair seemed to unnecessarily take offense stating (CUJournal, 10/23/2014): "I take exception to that comment.... Safety and soundness and sound regulation go hand in hand.  I want to make sure that is on the record."

Most reasonable folks might think you could do both - fraud focus and sound regulation - without "making a scene", but "making a scene", rather than making sense has been "the soup de jour, the mess a la mode" on Duke Street of late.

Maybe regular ol' credit union folks just don't understand "D.C. principles and protocols", we just "don't get it" and Mr. McWatters' comments really were some sort of intricately subtle, underhanded "BIG Mc ATTACK".

But most folks certainly don't think so and are really, really happy with the new look at NCUA...

Awaiting The "Second Coming": Are You Listening...?

You really wouldn't try that,
would you??

As most credit union folks know, getting NCUA to listen to reason and common sense is about as difficult as trying to baptize a cat.

If "listening sessions" were so important the first go round, wouldn't it make sense to schedule another series, during the second comment period? Or is all "the listening" over? 

The first RBC rule was simply inept and replete with "amateur hour"-type errors, now readily acknowledged by all as bizarre, downright foolish, just plain silly. 

But there in lies the problem!  So much energy and effort was required to overcome the initial nonsense that the real key issues have yet to be debated, nor "listened to"....  

Such as the rewriting of Congressionally approved statutes through an unchallengeable and seemingly unconstitutional regulatory process;  the arbitrarily imposed "individual minimum capital requirements", rubber-stamped by a poorly orchestrated appeals process, which is in fact a laughable fiction; the redefinition of credit union capital and net worth based on "whim and bias" unproven by either research, nor practical experience; the callous castration of a highly important, perhaps crucial, credit union dual chartering system....

All brought to you again,

 in the "Second Coming", by....

Awaiting The "Second Coming" Of The RBC: Crocktoberfest...

From The NCUA Report
(April 2011):

"Four Tips For Effective Comment Letters"

1)  "Does NCUA really read all comment letters on every proposed rule? Yes!"

2)  "Do comment letters really lead to rule changes? Yes!"

3)  "I assure you: NCUA is open-minded about workable solutions consistent with sound public policy."

4)  "Before we finalize any rule, we then deliberate internally. We consider changes based on the comments. And we talk through different scenarios about how a revised rule might play out over time.... we take it very seriously. "

"We look forward to reading your comment letters."

 

We, We, We ?

Four Tips For NCUA

(October, 2014)

1)  Consider asking for input and opinions - in an open, transparent, "all stakeholders at the table" dialogue -  before you write the proposed rule.  Despite what you may believe, most of your "stakeholders" are not stupid, may actually know something about the operation of a credit union, are equally concerned with strong/fair regulation, and also ..."take it very seriously."

2)  Stop looking for new Credit Union rule ideas by "dumpster-diving" over at the FDIC - despite those past, copycat  "Suze Orman Teeth and Jacket" ads: 

"There is a difference".

3)  Try to at least feign humility - the "Royal WE" is so very unattractive.

4)  And, note the growing signs that many of your "stakeholders" think that the current rule-making process at NCUA discourages participation, suffers from a lack of credibility, and is frequently viewed as just a ....

Mr. McWatters Tries To Explain To The Chair That She Is Confusing Cause And Effect....

Not too difficult to understand why NCUA CFO Mary Ann Woodson, a 35 year veteran, is hanging it up and calling it quits after listening to the little "dialogue " last week between Chair Matz and Director McWatters at the NCUA Board Meeting. 

At the meeting, during CFO Woodson's financial report, McWatters correctly pointed out that most NCUSIF losses were coming from small credit unions.  A true statement to which Chair Matz "took exception".  A veteran like Ms. Woodson understands that it is only a matter of time before another, similar "dialogue" will reoccur; and that the Chair will eventually turn to her and ask for her opinion as CFO on the disagreement.

 

Ms. Woodson is a highly regarded leader, ethical and principled - prone to tell the truth!  And, it is well known within the Agency, that "speaking truth to power" under the current regime has a tendency to be fatal.  Yes, Ms. Woodson a very good time to retire....Bon Voyage!!

HERE'S ANOTHER "REPRINT" TO VALIDATE THAT MR. MCWATTERS "GOT IT RIGHT" ... AND THAT THE CHAIR STILL ISN'T LETTING THE FACTS GET IN HER WAY:

Those Large Risky CUs !!!

"With more than $1 trillion in industry assets, deposits at federally-insured credit unions are protected by a fund of just over $11 billion.  However, four credit unions each has assets of $10 billion or more.  So, each of those four has assets nearly the size of, or greater than, those of the Share Insurance Fund."

 - NCUA Chair Debbie Matz, 9/18/2013

Oh Really....

Mr. McWatters Has Arrived: A Breath Of Fresh Air (At Last!) At NCUA?

Draw your own Conclusion!

According to the CUJournal (10-22-2014), Chair Matz and Mark McWatters got into a little "tiff" at the recent NCUA Board meeting over the issue of how to reduce the fraud losses paid by the NCUSIF.  

Chair Matz continues to harp (incorrectly!) on "the threat" posed by larger credit unions, while Mr. McWatters suggests that NCUA should focus on the facts, which clearly indicate that most fraud losses arise in smaller credit unions.  Facts and actual data have, of late, been considered as little more that an "inconvenience" by the current NCUA leadership, - especially when the facts conflict with the narrow-minded biases of NCUA's entrenched "ridiculocracy". 

Here's a "reprint" from earlier this year which shows that  Mr. McWatters is right....  LARGER CUs ARE NOT THE PROBLEM AT NCUA:

ACCORDING TO:

The NCUA Report

September 2013

"The [2008 financial] crisis showed that credit unions and regulators must be forward-looking and identify emerging risks sooner.  For example, credit unions cannot simply reach for higher yields without considering long-term consequences."  

"This is why NCUA issued a rule requiring credit unions to plan for interest rate risk and why we proposed allowing qualified credit unions to use derivatives to manage that risk.  We also created the Office of National Examinations and Supervision [the "ONES"] to focus on credit unions that pose the largest risks to the Share Insurance Fund."

WELL, THE RESULTS ARE IN BOYS AND GIRLS:

EVERY ONE OF THE 25 LARGEST CREDIT UNIONS IS WELL-CAPITALIZED!!

(As Naked Capitalism blogger Yves Smith would say: "Quelle surprise!")

NCUA's focus on credit unions with assets greater than $1 billion as "risky" has always flown in the face of the facts and NCUA's own actual history of losses from failing credit unions.  

Again for the record, that credit unions in this category pose "the largest risk" to the NCUSIF just because of their size is "robustly" delusional and falls victim to the classic analytical mistake of confusing size with risk. 

So let's do the geography, political risk analogy one more time.....

 

Based upon NCUA"s robust...

"SIZE = RISK" Theory,

The U.S. invaded the wrong country in 2001. After all Afghanistan is a country with a land area of only 250,000 square miles.

Clearly if "SIZE = RISK" then the U.S. should have invaded...

The Future Of Your Credit Union: Inside The Box Thinking?

FROM THE OCTOBER 2014 ISSUE OF

THE NCUA REPORT

Found the following to be weird enough to make this blog! 

(And that's pretty weird - right!?)

(Oct. NCUA Report pg. 7)  "While credit unions face the challenge of discerning what is lurking around the next corner, NCUA also faces similar challenges.  How will changes in the financial marketplace alter the regulatory tools and skill sets required to fulfill our statutory mandate to protect the system?"

"The future is indeed like that box of chocolates.  We don't know what we are going to get.  But each of us must realize that disruption is an inevitable wildcard by testing every hypothesis relating to accepted financial norms.  It's time to start asking, "What would Forrest Gump do?"

NCUA's best advice on the future for CU's is:

IT'S TIME TO START ASKING, "WHAT WOULD FORREST GUMP DO?" ???

GUMP ?

Not really sure where to go with that advice, are you?  Should we ask Forrest Gump what to do about RBC or has NCUA already asked?

Actually, instead of relying on Forrest Gump;  believe the NCUA should internalize what Forrest's mother told him...

RBC: Waiting On "The Second Coming"... A Gnawing Concern?

SOME REALLY GOOD NEWS! 

A "Robust"- Based Capitol?

 THE AGENCY HAS POSTED AN UPDATE ON YOU TUBE, CONCERNING HOW THE WORK IS COMING ALONG ON THE REVISIONS TO THE RISK-BASED CAPITAL (RBC) RULE!

YOU CAN LOCATE IT RIGHT AFTER THE ECONOMIC FORECAST VIDEO !! SAME VEIN, SAME LINE OF THOUGHT, SAME IMPORT!!

HERE TAKE A LOOK...

RBC: "The Second Coming"... Traveling At The Speed Of Slight.

KNOW YOU ARE ALL FAMILIAR WITH THIS FAMOUS QUOTE:

Brained-hair !!!

"Insanity:  Doing the same thing over and over again and expecting different results."

- Albert Einstein

So, consider this:  Who is...

Awaiting The "Second Coming" Of RBC....

TICK, TICK,....

Q: "CAN YOU PLEASE TELL ME WHY IT IS TAKING NCUA SO LONG TO REISSUE THE RISK-BASED CAPITAL (RBC) RULE?  WHAT'S THE PROBLEM?"

A: NOT SURE ANYONE KNOWS, BUT I CAN SHOW YOU THE PROBLEM THEY NOW HAVE...

NCUA Economic Forecasts: Worth Their Weight In Robust...

AS NCUA HAS PREDICTED INTEREST RATES CONTINUE TO SOAR:

Up they go !!!

The 5-yr. T-Bill:

Jan. 15, 2014   1.62%

Feb. 15, 2014   1.53%
Mar. 15, 2014   1.57%
Apr. 15, 2014   1.62%
May 15, 2014   1.53%
June 15, 2014   1.70%
July 15, 2014   1.69%
Aug. 15, 2014   1.54%
Sep. 15, 2014   1.79%

Oct. 15, 2014   1.31%



As Gregg Stockdale has so appropriately pointed out about the NCUA economic videos... ("archived foolishness")... "NCUA just keeps crying wolf"!  Actually,...

Why The Second Comment Period Was So Long In Coming...

"IT IS ONLY ERROR, AND NOT TRUTH, WHICH SHRINKS FROM INQUIRY."

- Thomas Paine

Risk-Based Capital: The Second Comment Period...

Roger that!

"IF STUPIDITY GOT US INTO THIS MESS, THEN WHY CAN'T IT GET US OUT?"

- Will Rogers

("They" are working on it!!)

Cheap Tricks…. IMCR

The cause for the delay???

As we await the "second coming" of NCUA's risked-based capital rule (RBC), would like to revisit over the next few weeks the most egregious example of Agency over-reach and underhandedness in the current RBC proposal...

 "INDIVIDUAL MINIMUM CAPITAL REQUIREMENTS" (IMCR).

You can be sure that the NCUA will not willingly delete this unnecessary, unfair, and dangerously undemocratic provision without a campaign of active, outrage by all credit union members. If credit unions needed 2,200+ comment letters last time to attract Congressional interest and publicly slap NCUA into reasonableness...

WE WILL NEED TO HAVE 200,000+ COMMENT LETTERS THIS GO ROUND.  

HOPE "YOU'RE UP TO IT".

Here's the refresher...

Caught in the act .… again?

If you've ever read a cheap, trashy dime store (guess that's a "dollar store" these days with inflation!) mystery novel, then you know the easiest way to find out "whodunit?" is to start at the back of the book.  

In the final, poorly plotted chapter, the evil-doer is always identified (it was the butler!) and how the murderous crime was committed (with the candlestick in the billiards room!) is also revealed.  These run-of-the-mill authors invariably save the worst for last.  The reader hoped for a new, imaginative story line, more deeply drawn characters, and more finely nuanced emotion; but closes the cover - played for a fool once again.

We're not even good
at "sneaky"!

NCUA's recent risk-based capital proposal is much like those trashy mystery novels, the worst crime is revealed in the last chapter of the rule (pages 195-198 of the 198 page printed draft.) Slipped in on the sly in the most common of underhanded fashion.  Hidden at the back with some assurance that you'd "miss it".  Crass trash, something of a signature of the genre.

The entirely new authority which NCUA awards itself ( for its' stellar, recent record of regulatory performance?) is designated as…

A Lasting Smile.... a Blast From The Past !!!

5th ANNIVERSARY EDITION !!!!

"Wiig'ed out?"

"In many ways, trust is a credit union's most valuable asset. This was really brought home to me in the fall of 2009 when I got a call from Suze Orman.  She said she wanted to learn more about credit unions - and she invited me to lunch. Suze asked about how credit unions work, and about the advantages they offer consumers. And she became one of the the most important friends credit unions could hope for...."

"Suze has lent her image - and her reputation - to NCUA's public education campaign...."

"Suze's confidence in credit unions speaks volumes.  It means she trusts credit unions with her personal brand."

- The NCUA Chair Keynote 

at the GAC - Feb. 2011

   "... she trusts credit unions with her personal brand."  
"... lent her image - and her reputation - to NCUA's ...." 

   Well, let's just hope that credit unions...

Prudent Risk Management....

H-m-m-m... No lie??

" When in doubt, tell the truth."

Always The Best...???

Say What?

"We hoped for the best, but it turned out like always."

Soft Eyes...

Sautee-Nacoochee, Georgia

Youngest son Thomas got married in North Georgia a couple of weeks ago and that was a good thing; his wife's name is Julia.

It was a good thing, because for the last few years his father (a very, very nice and reasonable person) had come under constant attack and increasing pressure from Thomas' three sisters and mother.  

The complaints from sisters and mother alike had a common theme:  "You need to talk to your son about Julia! He's going to keep fooling around, mess up, and let her get away! You've got to do something!" Guess you can figure out what a remarkable person Julia is when "from the get-go" she has three future sisters-in-law and a future mother-in-law, firmly in her corner, agitating on her behalf - just unbelievable, right!?!

My response was always:  "Don't worry; it's going to work out." Which invariably evoked a highly skeptical, hands-on-hip rebuke: "Oh yeah, well how do you know?" To which my reply was simply: "I just know."

Most women when they hear that kind of answer from a man are pretty sure he doesn't know what he is talking about.  Most of the time they are right. But not in this case; so, let me tell you how I knew.

If you've been around in life awhile, you can always tell when a man is in love with a woman.  It's really easy if you just pay attention. It's not how he acts; it's never what he says - he can fool you on those two! The tell-tale sign, the dead-giveaway is always in how he looks at her - those eyes don't lie!

He had it really, really bad... !!

A man who really loves a woman will always have "soft eyes" for her. Yep, you can always tell by those soft eyes! And, the first time I ever saw Thomas around Julia, he had the softest eyes for her I had ever seen.  

In fact it was the "worst case" of soft eyes I'd ever seen...

Thomas had it so bad he looked like Bambi!

And, if you'll take a look...

Makes You Want To "CUSS"...

Recognize any of this from a recent piece by Carl Cannon (10/5/2014) in RealClearPolitics.com?

Some quotes, excerpts and direct hits:

"Two directors have retired within the last 18 months. It's a good start."

"Vaunted Reputation?"

"The vaunted reputation of the agency has always been better than its track record.  The agency knew it, too, but this image of competence was cultivated partly as a deterrent. After September 11, 2001, things changed because edifices and agencies that symbolically projected American power were themselves possible targets..."

"Culture of
Intimidation?"

"Members of Congress were only asking questions because they'd read about it in the Post.  The most conservative Republicans and the most liberal Democrats were equally incensed. Maryland Democratic Rep. Elijah Cummings homed in on a "culture of intimidation" in which agency management rewards those who foster the agency's "invincible" myth, while punishing those who point out security lapses." 

"Can't take a hint?"

"But fixing the agency is going to take Congressional action, a change of culture at the agency, and a new attitude within the White House itself."

"It's time for a remake."



"Weak track record, culture of intimidation, needs Congressional fix...."

Sound familiar?  Could NCUA be...

Sipping Inspiration... ??

Grape new ideas... !!

"Alcohol can help provide what the Greeks call entheos, or the slight buzz of inspiration."

- Christopher Hitchins

A Question Of Capacity...

Worldly wise...

U.S. and global banking regulators were rigorous and disciplined in their development and analyses - literally over decades - of the new, risk-capital structures which were required, for sound international finance in the 21st century.  

They took their time because "getting it right" is critical for the U.S. and global economies, because finance drives growth, when executed prudently. 

These regulators' meticulous, scrupulous, conscientious efforts were well-documented in innumerable professional conferences, public dialogues, and scholarly papers. The new regulations were finally formulated and implemented in 2013, well before NCUA senior staff crafted their now infamous - and roundly ridiculed - risk-based capital (RBC) rule for credit unions. 


The technical data, the painstaking research, the excruciating results of the arduous debate were all readily available as a guide for the NCUA rule-crafters, but...

THE NCUA RBC RULE DRAFTERS FLUNKED 

AN OPEN BOOK TEST !!

Which, of course, leads to the crucial question:

"Does the Agency have...