June 14, 2010


  • Very well put and I agree that we need to deal with each Corporate individually however human nature being what it is and with all the special interest groups involved in the Corporates doing this will be difficult, if not impossible. Sometimes, the dollars and cents of a decision do not enter the picture when they should be the only things that matter.
  • OK Chip you framed the problem! Now what is the solution? Additionally, what happens to Legacy assets if we have deflation and a double dip recession?
    Jeff Farver
  • Question: Does not the OTTI represent the estimated future losses on the legacy assets even though they are currently paying interest and principal? At some point in the future, they will result in a loss that must be recognized.
    Bruce Cramer
  • To comment #2: Did you read the article? Can you not spot the conclusion NCUA needs to reach? Stop the direction you are heading before you wreck a vital system that most credit unions rely on!
  • I want some of what you're smokin.
  • Timing is everything in navigating potential issues and changing things for the better – Now is the time to act. If after you read this article you experience any pause, or doubt, or outright concern you need to act. If NCUA acts like they have in the past—like a regulator clerk hoping to clear an auditing comment from a report—instead of as a competent financial manager of cash flows, avoidable losses, and controlled work outs, then we risk double the losses in what might have been a sustainable solution. Do not let NCUA pass you a bill out of their love of convenient solutions.

    This is not a matter of just disagreeing with NCUA; it is a matter of partnering and having your opinion about how the endeavor should proceed. We all agree there is an issue. We all agree that we must be part of the solution. But few of us trust that NCUA will respond with long-term vision without pressure from outside parties. So where can that pressure come from?

    From you, by simply passing on your comments with this article to anyone that will listen. You are an employer – take it to your local representatives. You are a stockholder in a Corporate – take it to their boards. You are a citizen worried about rash actions when forward progress is so fragile – take it to other citizens. If you are concerned about the NCUA’s potential to hurt more than help, then make sure your voice is heard—and do it today.
    Randy Karnes
  • I do believe that the OTTI writedowns will proove to be overstated, perhaps greatly so. I am also fearful that NCUA has moved to a position with corporates (and natural person CUs) of eliminating risk rather than managing risk. They have been second guessed by their own Inspector General. I just hope they do the right thing from here on out with the legacy assets. The earnings and spreads on those which have not failed are tremendous right now and may be going forward on the floaters for some time to come. They are closer to the current analytics than any of us. Again, I hope they do the right thing.
    Joe Robertson