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June 21, 2010
Good points, but obviously much more can be asked -- especially relative to the word transparency. Just finished our board meeting for the month. Trying to explain to board members that run businesses what we (as credit unions) are being exposed to is truly a challenge. They can't believe we're in the situation we are. I could not explain how the entity that placed representatives at the two (2) institutions that is causing the vast majority of all the credit union issues is the same entity that is now running the same two (2) institutions that they declared insolvent, and is the same entity that is allowing the failed institutions that they are now managing to pay dividends on deposits that are among the highest in the land, that is now the entity that is taking money from every other institution in our galaxy that calls themselves a federally insured credit union to continue to fund the ongoing cloak and dagger charade. Oh, and is the same entity that will be deciding what a "clean" balance sheet is to the possible future detriment of the entire industry . . . Tell me it ain't so. Lucy, someone's got some 'slpainin' to do! Frustrated? Does it show??
Good questions for Monday's NCUA town hall meeting.
So if it turns out that the NCUA is too pessimistic in their estimates, do we get the money back? How?
Many of these same comments and questions came out at the SW Corp Economic Forum yesterday. We certainly were not aware of a liqudity crisis among the corporates - nor are the corps aware of a problem - very peculiar.
The same group who failed to note the 'risk' of what was going on is now the same entity who we are allowing to "fix" it without our knowing what the fix is - other than to shut up and pay it.
Where are our leaders in all of this? why do we continue to sit back and allow our members via our cu's to be adversly affected. There's a lot of complaining but not a lot of solutions. the CUNA group - what happened? The large cu's group - did you give up too? Why all the secrets, have we really so much to hide that we can't get together and pull ourselves out?
I am beyond frustrated. Each day I see an industry that I've devoted my life to slip away. Someone protect us from ourselves.
A weak voice calls out
In thinking about the NCUA, the words incompetent, disfuntional, wanton, irresponsible, criminal, negligent, and ain't got a clue and ain't likely to get one come to mind. Is there any hope? I'm this far from concluding not.
Larry B. Davis
For more then 28 years I have been in this business you always have to watch what NCUA does, not what they say. The NCUA Board says things, but the staff always does whatever they want and it is rarely what the board said and even more rarely in our best interest. This is all about conservatorship of Corporates so they can take the legacy assets, bundle them with a guarantee and then sell them at a major loss to the Pimco's of the world. NCUA will then say "we told you so" by locking in the loss just llike they did with CapCorp. If it's any more comforting, the Treasury is behind all of this. Dictating all of this to what they call the "Keystone Cops" of the financial world. Criminal is the only word for all of this!
So we all know that NCUA is doing a bad job dealing/handling the corporates both in the past and now but we also let corporate executives with big salaries including board members mismanage the corporates and unfortunately many of these so called "experts" are still around!
Great insight and comments. My question is...what can we do, at this point?. What action can we, as credit union executives, take that will make a difference? Sitting back and criticizing will not change the ultimate outcome. We have to come together, as a united group, and push the transparency issue....the question is what action can/should we take that will be the most effective?
As you all are aware, each credit union is being assessed a premium of
13.4% for the corporate stabilization. They already have a loan of 690
million but NCUA is going to give them another 810 million for seasonal
liquidity issues. In the fall NCUA says they will take back 500 million of
that to pay the 1.5 billion loan from the treasury (1 billion WILL HAVE
BEEN paid by us). Why don't they take back the whole 810 million?
At our small credit union the examiners asked us to pay dividends that
were at or below market to reduce expenses. As a result shares dropped.
This increased our net worth and reduces our share insurance premium.
Why are the corporates still even paying dividends? If they reduced or
stopped paying dividends shares would drop and net worth would increase.
The share insurance premium that needs to be set aside would be less.
If you go to the NCUA web site and read letter no: 10-CU-09 page 5 states
in BOLD PRINT "Ultimately it is the credit unions - not NCUA - that
control the amounts of their assessments."
Who are they kidding? Since when has anything that I've done at this
credit union effected any other credit unions' assessment?
Read the bottom of page 3 where it talks about credit unions that will
fall below 6% net worth and be required to prepare a Net Worth Restoration
Their response - "NCUA will be as flexible as the law allows in reviewing
and approving a Net Worth Restoration Plan for every credit union that
falls into Prompt Corrective Action (PCA) due to assessments.
As for having a plan to save the system, what will be left to save? The
premium assessment for the NCUSIF this fall is predicted to be between 20
- 25 percent.
NCUA better come up with a better plan for helping the small credit union
besides mergers or your 7,600 plus credit unions will become 5,000 in a
few short years and then what?
I wish I had the answers to fix all this mess. I have loved my credit union job for 31 years. The last two years have been torture for most of us. I know a CEO that died a few months ago with cancer, while still trying to keep his credit union running during this economic meltdown. What a pitiful way to spend the last few months of your life. Shame on NCUA.
I agree with comment #7 by Marcia Harrison. We need to take some sort of action versus sitting back and letting the NCUA destroy us. I am not sure exactly what we can do but maybe it is time that we ban together as the cooperatives that we are and pool some resources to fight this legally or determine if we can. We have to have answers to the NCUA for everything that we do, let's make them answer to us. Without us, they are not needed, or at least as many of them.
Deidra M. Williams
If NCUA's reason for doing this is to turn FCU's into Mutual Banks, then they will succeed! They are the bacteria that only thrive because the host (CUs) is still healthy. If they continue to take our earnings in the form of assessments they will kill the host and they, in turn, will die.
Maybe that's our answer. Maybe that is what we should do- threaten to leave en mass. That might get their attention.
This whole thing is so frustrating to me. I, like so many other CU execs are experiencing the worst years in the industry. I really don't know how much longer I or any long term exec will be able to tolerate it.
Cal Credit Union
Very good points about an arrogant federal agency that does not seem accountable to anybody. Was there any fallout from NCUA issuing its annual report a year late? NCUA may prove a regulator is needed for the regulators
NCUA continues to deal blows to the industry, but CUNA and NAFCU need to be held accountable too. They pushed, prodded and cajoled NCUA on expanded investment authority. And, why is the only person named as a defendent in the two corporate CU lawsuits the best choice to run CUNA ? The industry is not serious about getting its house in order.
under the radar
Regarding comments #7 and #12...you are absolutely right that out industry must engage our regulator. We have elected leaders and professional staff at our trade associations. What have they done and what are they doing? Are they simply sitting on the sidelines on this one? Perhaps they are too occupied with the long string of legislative "wins" we have experienced over the past fifteen years.
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Industry Performance (3Q 2015)
NCUA’s Voluntary Prepayment