As reported in CU Journal on February 1,2012 it is the position of NCUA as put forth by David Marquis that NCUA examiner findings are based upon individual judgment and no further regulation or “standards” need to be instituted.
During the town hall meetings surrounding the failure of WesCorp, we were told that the agency was powerless to stop what they were doing. You stated that the agency had no jurisdictional reason to curtail WesCorp’s investing practices.
How do you reconcile these two statements? Either NCUA had all the power they needed and failed, or they were powerless because there were no standards.
Yet you argue for no standards.
Please comment.
Dear 1st Thoughts:
ReplyDeleteMy name is Debbie. Thank you for your interest in the NCUA. The NCUA interest is in collecting assessments from credit unions. Because the NCUA makes mistakes we need these assessments to cover them up. NCUA is an acronym for Negligent Credit Union Accountants. Due to the fact we have no existing standards the NCUA is now writing some new Customized Regulatory Accounting Procedures. The acronym is CRAP. We intend to impose and impress the CRAP on credit unions going forward. You may experience some NEW CRAP at your next NCUA examination.
!st Thoughts: You cannot draw conclusions from anything Debbie said to WesCorp members during town hall meetings or at any other time. We know from first hand experience that WesCorp members are a very gullible group and will believe anything they are told at any time. The correct answer is B), "NCUA examiner findings are based upon individual judgment and no further regulation or standards need to be instituted."
ReplyDeleteWesCorp members demonstrated their inability to think analytically, critically, or intelligently several years ago. The examiners will think for them from this time forward. Judging by the damage their corporate credit union did to the entire credit union industry, methinks NCUA's actions are probably a good thing!
Actually, to be correct WesCorp DIRECTORS & MANAGEMENT demonstrated their inability to think analytically, critically, or intelligently several years ago. If these DIRECTORS spent as much time reading management reports, looking at the IRR (Interest Rate Risk) and ALM (Asset Liability Management) reports they would still be in business and operational today. Instead these DIRECTORS spent considerable time planning their next WesCorp all expenses paid junket to CUNA GAC (Government Affairs Conference), trade association conferences and hosting their own lavish junkets. These DIRECTORS were living rich off the back of the natural person credit unions they were pimping. Ask some of these former DIRECTORS just how many WesCorp bought and paid for golf club outings they experienced? Ask these former DIRECTORS just how many custom logo embroidery WesCorp business shirts and jackets do they own? Natural person credit union CEO's elected peer CEO's to represent their interests on the WesCorp Board of Directors. Sadly, these self serving CEO Directors were in it for the junkets and paid little if any attention to the balance sheet, income statements, ALM,IRR or any other reports provided. They did read the conference/junket material and they paid attention on how to register for these events while getting 100% reimbursement from WesCorp. These Directors got a free ride while WesCorp got raped, pillaged and plundered. Were the Directors careless? Yes. Were the Directors negligent? Yes. Was it criminal? To answer that question ask all the soon to be unemployed WesCorp employees? Criminal these poor folks are out of work, unemployed while the Directors walk away with their WesCorp logo embroidery shirts still on their back.
ReplyDeleteSorry bud, the WesCorp members don't get a free pass on this one. They saw ALL the things you described IN REAL TIME. They got paid above market rates on certs and overnight investments. They fed at the trough and never complained about the excess. If WesCorp officials had told them that the moon was made of green cheese......well, you get the idea. What happened at WesCorp DID NOT happen at any other corporate credit union, certainly not to the WesCorp extreme. WesCorp members are/were just plain dumb.
DeleteI assume you were one of them???
Sorry Bud Bob - WesCorp Directors & Managment don't get a free pass on this one. The Directors & Management saw all things above IN REAL TIME. Why do you and so many others fail to place responsibility and accountability where it justly belongs? It was CEO Siravo, CFO Burrell, the executive team, the Board of Directors & Supervisory Committee that must accept responsibility for the failed WesCorp, USCentral and other corporate credit union failures. You are correct other corporate credit unions did not fail. Call it competent leadership. Call it competent Management. Call it competent Directors. Interesting CUNA CEO Bill Cheney was on the Board of Directors of both USCentral & WesCorp. Both were placed into conservatorship. The corporate credit unions that remain open for business today never had CUNA CEO Bill Cheney on their Board of Directors. Do you see even the slightest trend here? By your line of reasoning when natural person credit union's fall into NCUA conservatorship it must be the members fault. Sorry, I don't buy it. WesCorp paying above market rates - like all of 5 or 10 bps? If that is true why did WesCorp borrow $10Billion from Wall Street? If member money was pouring in because of monster rates WesCorp would not need a $10Billion Wall Street Note. You are naive to blame the WesCorp financial disaster on the membership. The fiasco was due to the elected WesCorp Directors, CEO, CFO and executive team negligence and their gross incompetence. Last time I looked credit union Directors are responsible for and owe a fiduciary duty and responsibility to the membership. Last time I looked the NCUA was prosecuting WesCorp management for breach of fiduciary duties and negligence. I have yet to see the NCUA sue the member credit unions for taking a 5 or 10 bps gain on a share certificate. You are suggesting WesCorp credit unions had some unjust enrichment with monster rate certificates. Even under NCUA conservatorship the certificate rates were never readjusted by the NCUA. The NCUA never did a "claw back" of these "alleged" unjust above market rate gains. No we never invested with WesCorp. Who needs a middleman like WesCorp when you can go direct to the underwriter? We always obtained better rates going direct with First TN, Morgan Keegan, Cantor-Fitzgerald. Now former WesCorp defendant director & former USCentral director & now CUNA President Cheney plays lobbyist before NCUA. It's laughable. It's pathetic. One of these days I will tell you how I really feel. It appears the NCUA saw merit in the lawsuit filed by 3 or 4 rogue former WesCorp credit unions - enough merit such that the NCUA is now prosecuting this civil action. It should be in criminal court - criminal economic crimes bordering on financial terrorism of credit unions by our elected WesCorp leadership.
ReplyDeleteHey Bob - I notice several corporates still in business like Corporate America, Corporate One, and Mid-Atlantic to name but a few. How is it they were able to dodge NCUA conservatorship? How did they survive when USCentral, WesCorp and Members United went into conservatorship and then kaput? Did the directors at these surviving corporates competently pay attention at corporate credit union director meetings? Maybe. Did the directors at these surviving corporate credit unions pay attention to Asset Liability Management meetings? Maybe. Should we praise the corporate directors for competent and sound decision making? Maybe. If these directors made incompetent and unsound decisions like the former USCentral & WesCorp directors like CUNA CEO/President Cheney and his gang who would you hold responsible? Of course you hold the directors responsible. If the directors made incompetent, negligent decisions in setting deposit rates they should be held responsible. According to your line of thinking you fault the member credit unions' for recognizing a good rate and locking in. Did the credit union membership hold a gun to the directors for above market rates they could ill afford to pay? I don't think so. If as you propose WesCorp was trying to corner the market with above market rates exactly who is at fault? Once again, you would blame the credit union membership. NCUA is correct to prosecute in civil court those responsible: the highly compensated folks that lead to the corporate credit union conservatorship for their own personal self interest. The legal term is unjust enrichment/unclean hands. Like a SIRAVO $6Million SERP. And how much did the others shakedown by way of lawful extortion? Hey Bob, I don't know of a single WesCorp member that approved the $6Million SERP to SIRAVO. I do know of 11 directors that approved of the $6Million SERP to SIRAVO. I wasn't one of them. No Bob, the WesCorp members are not as you stated "just plain dumb" rather it was the directors and management together that were/are "just plain dumb." One of those WesCorp directors is now the President/CEO of the CCUL (California Credit Union Legaue). Another WesCorp director is now the President/CEO of CUNA. And that Bob is using your words "just plain dumb."
ReplyDeleteForgive me 1st, I didn't realize that WesCorp officials appointed themselves. Maybe you can explain to me the process by which they avoided annual member meetings, elections, etc. And, if this was indeed the case, why didn't WesCorp members deal with a real corporate credit union? Ya know, keep the money in the movement and all that kind of stuff.
ReplyDeleteBecause credit union's elected the Board of Directors we are guilty. Guilty of what? When we elected these Directors was it a conspiracy we all held together to rape, pillage and plunder WesCorp? Did we elect Directors to make careless business decisions? Did we elected Directors to ignore basic elementary Asset Liability Management deposit and investment rates? Were the Directors elected to engage in negligent business practices? Once elected did the Directors receive a "free pass" to make stuck on stupid decisions resulting in WesCorp's conservatorship, and demise? Bob, why are you so set in giving these WesCorp Directors responsible a "free pass" when it comes to being held accountable? Do these WesCorp Directors permit their respective credit unions' to be so mismanaged by their directors and management team? I doubt it. I wonder if these Directors have a $6Million SIRAVO SERP at their respective credit union waiting for them on retirement day?
ReplyDeleteBob how should we keep the money in the movement? I got it. Invest in your Corporate CU. Then the Corporate CU will go to CountryWide, Wells Fraudo, Bank Of Fees and purchase bank underwriting Mortgage Backed Securities. Now that is keeping the money in the movement. Credit unions won't make sub-prime, interest only, pick a payment, 125% financing real estate loans. Instead we will invest our funds into the Corporate CU. And the Corporate CU will invest in these very sub-prime, interest only, pick a payment, 125% financing bank real estate loans. This is what Members United, USCentral & WesCorp did. It makes us sleep well at night to..."Ya know, keep the money in the movement and all that kind of stuff." You talk about real corporate credit unions. You might be on to something here. Maybe WesCorp was not real. The losses were real. The $2Billion Capital deposits were real. The Directors and Management were "unreal." Unreal to see the massive destruction the elected leadership and highly compensated management approved. It is "unreal." And somehow the credit unions must be held responsible because we elected them. That leads me to another question. CCUL CEO/President Diane & CUNA CEO/President Bill both served on the WesCorp Board of Directors. And CUNA CEO/President Bill served on the USCentral Board of Directors. After serving as a WesCorp Director Diane is now CEO/President of the CCUL. After serving as a WesCorp & USCentral Director Bill is now the CEO/President of CUNA. Did the credit union community miss an annual membership meeting or election? Is this the best of breed to represent credit union's at state and national trade associations? Maybe this is where that "free pass" comes in play. Like a Monopoly game piece "free pass" out of Jail.
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ReplyDelete