Y'know we really need to move on to other important topics; RBC is now on the books - the deed is done! So, Onward and Upward!
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| Full of air, well-warmed! |
In his "Petty-sburg Address" on RBC, Mr. Metsger quotes "with apologies to Winston Churchill, "Never have so many commented on a rule which impacted so few." Had Mr. Churchill had the opportunity to read Mr. Metsger's harangue, he would have reused another of his famous quotes to note: "He is a modest man who has a good deal to be modest about."
There are, to quote Churchill, "numerous
1) "Yes, in 2000 the NCUA Board issued a fatally flawed risk based requirement.." [Which evidently the NCUA Board chose to do nothing about for the next 15 years! Did they know it was "fatally flawed" or were they just "flagrante ignorante"?]
2) [The 2000 RBC rule] "Is poorly understood. In fact, I defy anyone in the audience to explain it in a way that is comprehensible to someone who isn't familiar with it."
[ The more you read that sentence, the more you will come to love it!]
3) "Of the 1,489 complex credit unions that are subject to the rule, only 16 will have their PCA category reduced, and not more than one[!] will have its PCA category reduced to undercapitalized."[So why are we wasting time passing a rule that affects only 16 out of 6,000 credit unions?]
4) "The real questions credit union members might be asking are: "Why are credit union capital buffers so large; and why aren't credit unions doing a better job of leveraging their members' capital?"[Appears Mr. Metsger believes credit unions are overcapitalized, which is evidently, to his way of thinking, yet another reason for this RBC rule!]
5) "This agency has been working on a new risk-based capital rule for five years: 2011, 2012, 2013, 2014, and now 2015."[And yet still couldn't get it right until Congress was forced to hold a loaded gun to NCUA's clueless head!]
To which Mr. Churchill might say, and I quote...
Of Mr. Metsger:
"He is one of those orators of whom it was well said: "Before they get up they do not know what they are going to say; when they are speaking, they do not know what they are saying; and when they sit down, they do not know what they have said."
- W. Churchill
Of the NCUA:
- W. Churchill
[And hey, Good luck next year with that really big tiger - Congress!]
8 comments:
Lucky for credit unions, because of his moronic behavior, Metsger will never be confirmed as chair of the agency. Phew, thank goodness.
I am Bill Brooks. I was on the NAFCU Board at time the PCA regulation was put together. PCA was a compromise at the time to get an egomaniac at the Department of Treasury to sign off on CUMAA. In order to get what was perceived as the greater benefits of CUMAA the Trades accepted the deal with the devil and allowed PCA to be a part of CUMAA. BTW: There is no correlation with membership access and PCA. What can I say, we have a fatally flawed process for getting necessary legislation passed that would give a now invisible and unaccountable civil servant, and I use the term servant loosely, so much power.
I was NAFCU's representative on a committee who worked with NCUA to develop PCA. The backbone of the approved system of PCA came from a draft proposal that I presented to the committee. The regulation met all the requirements of the law. Especially, recognizing the unique nature of cooperatives. What Mr. Metsger fails to understand is that there is a implied accounting equations for credit unions written into the Act. Basically, credit unions are required to earn money and pay necessary expenses and funds leftover after a reasonable provision for potential losses are to be returned to members. The accounting equations for credit unions looks like this: Income-expenses-reserves-dividends=zero. In a not for profit cooperative the income belongs to the members. Period!
Over reserving to protect the FUND more than reasonably necessary is a violation of the Act. If there were fatal flaws with PCA, or credit unions took on risks that were not considered at the time of promulgation of PCA, than it would have been appropriate to amend the regulation. Hopefully, this is simple enough for Mr. Metsger to understand!
Because I was drinking heavily at the time I can paraphrase W. Churchill: Mr. Metsger I in fact may be drunk, but tomorrow morning I will be sober and you will still be stupid!
For those readers are who are of a millennial-type age and are, therefore, unfamiliar with a good bit of CU history; what Bill Brooks retells is precisely accurate in substance and in fact.
You might also like to know that Bill Brooks served successfully not only as a NAFCU trade association volunteer, but also as an innovative CEO of a Maryland CU, and as a highly competent executive with the NCUA. He knows well, that of which he speaks.
Bill Brooks is also one of the best theoretical minds in the credit union arena - past and present.
His weaknesses are his overt fondness for the CFPB and Elizabeth Warren...
Jim! Someone hijacked your blog site! The very kind words are very much appreciated. Much better than becoming a target on your blog site.
Bill Brooks never quite made it to the executive level at NCUA. The day before NCUA advised me that they were promoting me to the Sanctum Santorum, I accepted the position as a CEO of a local credit union. NCUA was a day late back then also.
If by overt fondness for CFPB and Elizabeth Warren you mean I dislike them only slightly less than Beelzebub and Norm D'Amours you are correct with your observation that I have an overt fondness for them!
Mr Brooks,
Mr Blaine can't talk bad about you and CFPB and Liz Warren, as I recall, he and Frank Pollock of PenFed endorsed the creation of the CFPB.
Guilty! Still support the ideal of fairness in financial services - always will.
Don't you?
Of course! Just not via the CFPB, and not much the fan in recent years of NCUA.
There was nothing theoretical about how dumb the concept of the CFPB is! They will only prove to screw up delivery of financial services and do nothing to advance fairness. Only creative competitive alternatives promulgated by people of goodwill can bring about fairness in financial services.
We have to find it in our hearts to forgive Jim for some days he knows not what he is doing!
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