20/20 Visionaries...

" Today, part of the mission of our credit union in 2017 is to help NCUA learn how to substitute foresight for hindsight."

Love Train...Track 2 !

Here's another "eye-dea"...

By the way, North Carolina credit unions are more than amenable to signing "cross-region hugging agreements".  If your regional director is down here visiting Pinehurst, The Outer Banks, or The Great Smokies; we're quite willing to hunt the rascal down and let 'em "embrace" a little extra Southern hospitality! 

We also need to recognize that some regional adaptation of the "hug 'em up" strategy may be necessary, if the program goes national.  Native Alaskans can "rub noses" and French-country Cajuns can "peck them on both cheeks" [not both sets!], might call this "the kiss-off campaign variation"! For the athletic, sports-minded folks of the far West, it would probably be acceptable as mentioned to give your NCUA senior staff official "a little pat on the heiny" when they "enter the game", but no head butts - please !!

Love Train....Hug 'Em Up !!!

Can' be all that bad...!

Really can't believe all the constant whining these days about the NCUA - seems to be almost obsessive with some folks!  You would think from all the criticism that NCUA was problem "numero uno" on the planet - out there ahead of poverty, unemployment, health care and tax reform. 

Well, maybe it's time to stop getting so uptight about the senior leadership at NCUA. You can see that they are "feeling threatened" and have become somewhat "North Korean-ish" in response to the mere whisper that there could be questions about their inerrancy.

Wanted to give you a little head's off...
... e-r-r head's up...
  on your upcoming exam!

Y'know meeting an NCUA Duke Street Robusterian or your Regional Director should not induce the same sort of panic as the magical appearance of a highway patrol cruiser in your rear view mirror.  Talking with an examiner should not remind you of the time you were commanded to the Principal's office over the intercom in middle school.  After all, we're the good guys - remember?  We're still innocent until proved guilty - right?  No need for butterflies; we need to "come to grips" with this issue!  C'mon "let's handle it"!

Let me propose a little a plan of personal "outreach"....

Fine Whine...

The capital markets specialist was much like a fine French Beaujolais....

....young, dry, lightweight, 
a bit fruity.

(Not yet robust!)

Profiling Credit Unions: Guilty Until Proven Innocent?

CREDIT UNION LIVES MATTER!

TIME FOR A CHANGE IN ACCOUNTABILITY!

Banzai...!!!

... means you never have
 to say (or admit!)
you're "sorry".

It is increasingly obvious that senior level failures at the Agency are squelched, white-washed, veiled and varnished - never to be acknowledged, all without consequence.

Which is why the NCUA is one of the few places in all the world, where you can meet....

All's Well At Exam Time.....

An ancient Chinese proverb famously tells the 

Well, well...

story of a frog which lived at the bottom of a well. The frog was supremely confident in his understanding of the world; and, from his point of view, the sky he saw above him represented the entire universe.  The frog had no concept that anything existed outside his realm of understanding.

Bottoms up!

Limited understanding, limited outlook, limited vision sounds like a recipe for farce - except that it's not at all funny when "the frogs" decide to drag everyone else down to the bottom of the well.

Most credit unions, out of deference to and support of authority, have tried to "toad the line"... but if our regulatory "visionaries" keep it up, lots of credit unions are going "to croak".

Looking forward to another "ribbeting" (18 month!) exam cycle ....

What Are The Odds...?

Guess I should 'fess up that I am in Las Vegas (business of course!) which makes no sense at all for me, since gambling is the only vice I lack. 

Everyone I ask always claims that they "do pretty well at the tables" on their Las Vegas trips. I still wonder how those fabulous hotels can be built if folks are all doing "pretty well at the tables"?   Somehow that "analysis" doesn't seem to add up...

What Are The Odds ??      

Under-pinning the 
"sport" of gambling, 
most statistical analysis, interest rate risk measurement, and standard economic forecasting is some form of probability theory. 


Probability theory attempts to measure the degree of certainty - or uncertainty - which should be assigned to a given estimate.  How likely - or unlikely - is that forecast "to become true" ? How much confidence can one have that an analysis is valid?  In gambling and games of chance, understanding "the odds" can help limit your losses or improve your chances of success. We all also use probability theory in our daily lives: "it's 50-50"; "it's a slam dunk"; "it's worth the risk": 
"there's not a snowball's chance in..."  

Spin Doctors ??

Within the credit union world, we are being asked to perform ever increasing rounds of risk analysis and ALM modeling - consuming huge amounts of time and resources with little, if any, reliable gain in certainty or accuracy.  

But much is at stake in any challenge to the 
"all gnome-ing ones" from Big Blue. Putting "your cards on the table" can often become a "one-sided bet", a game of regulatory "roulette Russianne" - with a stacked deck and a rigged wheel of fortune !!

But whining aside, here's a probability question for you to pose to your examiner at your next exit interview...

Q:  Out of the full universe of statistical possibilities, what is the probability that the only folks who know how to run a credit union have all ended up working at the NCUA? 

From The Field: NCUA , On The Move...

Very interesting idea...!

Read this intriguing statement, in a recent e-mail from an NCUA examiner, about an upcoming exam:

"Which allows me to segway into the next exam..."

Given that unusual thought, started to imagine how he might appear on his next visit...

Problem Case Officer.....

An NCUA "PCO" 
 (Personality Case Officer...!!) 

DEFINITION:  

"An examiner who identifies a problem you do not have, in a way that creates a problem you do not need, and then offers a solution which will not work."

And then wants to know...

Government Surveillance...

Equipped with the latest
"AIRES-compatible" photo hi-tech....

Body cams were recently issued to all NCUA examiners during their annual, very "robust", top secret, confidential "hush-hush", deadly serious, highly specialized, "we really mean business" training conference.

The first live picture 

has just been released...

On Finally Getting Around to Reading The "New" RBC Rule...

"There is something fascinating about the NCUA's "logic" in  the "new" RBC rule.  One gets such wholesale returns of conjecture out of such a trifling investment in facts."

              - Mark Twain

And, quite frequently, "the conjecture"** is simply a...

Examining An Average Risk...

Next career goal: the NCUA?

Was arguing (their terminology) / discussing (my terminology) economic modeling and interest rate forecasting with a couple of Janet Yellen/Ben Bernanke wannabe-type examiners the other day.

Sure I'm calm...!

The capital market specialists (the real"capital punishment"!) sensed that I had little faith in their forecasts and analyses.  Perhaps it was the hysterical hair-pulling, the rolling wildness in the eyes, or the profuse foaming from the mouth which betrayed my calm demeanor. Actually my "faith" in their grasp of economics and, more particularly, their grasp of reality was far less than little.... 

Gave them very
"high ratings"!

It has never concerned me too much when a person doesn't understand something; because, at heart, life is about learning new things from new experiences... and hopefully, we all do so everyday! "Not knowing" is not where problems generally arise.  Problems most frequently arise from folks - "specialist" types - who are dead-certain in their "wisdom", confirmed in their understanding - the "know it all", the self-assured fool, who lacks the gene for listening.

Our "argument / discussion" centered around the value of statistical averages, regression analyses, Monte Carlo stimulations (sp?) - "the basic" modeling sort of stuff.  If asked, I might have confessed that I wasn't (within several standard deviations!) always real sure what all that "stuff" really meant. But of course, they were more interested in reveling in their own "intelligence" than in exposing my "ignirance" .... guess you know the type.

"Just press 2 & 4..."

Anyway, we parted on less than amicable terms - much less to be exact.  As the elevator door was closing, wanting to make sure they knew "where to go"; I told them that the parking deck entrance was located on the third floor; and that, if they would press button two and button four that "on average" they would get there.

I haven't really bothered to check on them since.  Do you think I should....?

New Feature: "NCUA Larry Of the Week"... NCUA Third Party Oversight

From The CUTimes:
               (3/18/2015)

From a Heather Anderson piece on NCUA's legislative priority to acquire regulatory powers over all credit union third party service providers: 

Really nuts!

"However, it also seems like a major NCUA operating budget increase would be unavoidable."  

"The NCUA insists otherwise. Director of the Office of Insurance and Examination Larry Fazio told a breakout group at GAC the agency is hoping to keep vendor authority as budget neutral as possible. Most people found that statement unbelievable." 

If you ask professional credit union leaders (and of course, NCUA would never think of doing that!), they will quickly tell you that acquiring the expertise for compliance, cyber-security, risk management, monitoring and control is anything but "budget neutral"!  Knowledgeable, experienced people are an expensive, scarce resource at this time.

But, maybe this isn't another NCUA "larry"; perhaps the critics have forgotten that NCUA has developed some unique, internal approaches to training...

A New World Order...????

Before...

Some people regulate; 
the rest of you have to work...

Leadership ....

The Art of Rule Making at the NCUA...

In Reflecting On The 2014 Risk-Based Capital (RBC) Rule....

"In a hierarchy, every employee tends to rise to his level of incompetence."

- from the The Peter Principle  
(L. J. Peter, 1969) 


NCUA's capital markets specialists definitely rose to a new level with the 2014 RBC rule - and "robustly" so!!!

Think they can take us higher 
in 2015 ???

The Principal Risk Metric At NCUA....

         ???????????????????


... if I told you I'd have to kill you!

           (But it is funny !!!)

           (... and very robust!!!)

Aggravated Assaul.....?

"Don't you ever smile?"
"I am smiling!"

There is nothing wrong with an examiner, that trying to reason with him won't aggravate!

NCUA Call Report: Credit Union Membership - A "Potential" Stochaste...

The "buzz" has already begun on the countdown (

UFG !!

perhaps that should be "countup"?) to the magical number - 100 million credit union members in the U.S.! 

Definitely a watershed moment - right?  CUNA in its excitement has even put aside the UFG campaign (don't try to make that into some sort of vulgar text message abbreviation - it stands for Unite For Good!) in favor of a spiffy "100 million member Flashdash".

In the "loop"..."robustly"??

What's even better than the trade association push, however, is the cooperation from the NCUA in validating - through those ever important, "file-on-time-or-die" 5300 Call Reports - the official, Federal agency confirmed membership count.  As always we can rely on the economic robusterians and stochastically-enhanced gnomes over on Duke St. to give us the right metrics....