By Frank J. Diekmann
It is said that for airports, police departments and even the travelling public, it’s the same day, every day: Sept. 11, 2001. That’s the effect that tragic day and the helpless feeling of vulnerability continue to have 14 years later.
For credit unions, the situation is similar, except that the day is March 20, 2009. That’s the day the once-proud and certainly invincible WesCorp and U.S. Central were placed into conservatorship. In many ways in credit unions, it’s still March 20, 2009.
The latest example of that could be seen and heard last week when the NCUA board met and voted in favor of issuing for comment a risk-based capital plan. That plan can be traced straight back to that day in March almost six years ago when credit unions felt helpless and vulnerable and angry. That’s the day many learned that PIC could be picked off, that assessments no longer applied just to home values (and, for that matter, that home values were no longer what they were assessed), and that securities weren’t so secure.
Since Sept. 11 we’ve all heard the words “never again” spoken often and with conviction. “Never again” can the country be caught unaware of the terrorist threats, say the politicians and police.
In credit unions, you don’t hear those two words used as often, but the message is the same from the regulators.
“This agency made the mistake of cutting staff in the years leading up to the recession, cutting 71 FTEs between 2001-08, and we expanded to 18 months the time between exams,” said NCUA Chairman Debbie Matz at the agency’s November meeting, when the board was voting on the 2015 budget. “The result was the agency was unable to identify many credit unions’ problems early enough to save the losses.”
Matz has made clear, as recently as the January board meeting, that while she’s chairman there will “never again” be losses like those seen during the recession.
Critics are quick to point out that NCUA had examiners on-site at both failed corporates, and still that was insufficient. While that argument is being debated, what can’t be debated is that credit unions are still paying off $750 million in losses to the insurance fund from corporate and natural-person CU failures, and none of that counts the capital erosion to CUs when their paid-in capital wasn’t paid back, when loans went sour, and deals went bad.
It’s January, and both CU trade groups are out with a joint critique of the new risk-based capital plan. From now through April the CU community and others will be authoring analysis and comment letters in response.
But whether it’s January or April 2015 doesn’t really matter, because in credit unions it’s still March 20, 2009.
And Now For A Completely Different Debate
On a completely different subject, gender equality in credit unions remains another much-debated issue. While the data show a large number of female CEOs, the practical reality is that those numbers are skewed by the preponderance of women holding CEO titles at small credit unions. The top 100 CUs remain mostly a guy thing when it comes to the corner office thing.
Outside of credit unions, new research on financial companies has found women are making gains in senior management, although it can be hard to discern at times just what the numbers mean—if you can get the numbers at all.
Researchers using data from forms companies of more than 100 employees must file with the Equal Employment Opportunity Commission found that just four of 13 financial companies in the Standard & Poor’s 100 Index share their complete EEO-1 data with the public: Allstate, Bank of New York Mellon, Citigroup, and Bank of America.
Others, such as JPMorgan Chase, Morgan Stanley, and Goldman Sachs have revealed some of their EEO-1 data in annual reports, sharing broad percentage breakdowns of women and minorities among different employee groups. Others, like American Express, publish none of the data.
Still, an exec with Amex recently said that the percentage of female executives at the company rose to 39% from 37% between 2010 and 2014, and more than 60% of the company’s global workforce is female. How that breaks out wasn’t, well, broken out.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info.