Preparing for the next system failure
In the movie “The Day After Tomorrow” the climate gets so severe that millions of people have to flee to Mexico in search of warm weather. I was thinking of this plot line as I drove down to North Carolina for my Niece’s wedding this weekend after spending some time in DC. You have to get to Southern Virginia before you see any real signs of Spring.
It felt unnatural to be intentionally heading North on Sunday afternoon. That being said, my wife was getting tired of my mutterings about insurance funds and megabanks so it is time to get blogging again.
Last Monday I noticed that the retired Captain Ahab to the credit union’s industry’s Moby Dick was up to his old tricks. With some excellent research Keith Leggett reported that the NCUA sent a Whit Paper to Congress a couple of years ago seeking legislative authority to create a more complicated and ultimately larger share insurance fund for the credit union system.(http://creditunionwatch.blogspot.com/2015/04/ncua-white-paper-on-reforming-ncusif.html ) CUNA has provided a link to the document. Maybe it’s because I was viewing all this from a distance, but a system that ties insurance fund assessments to both the size and complexity of a credit union’s operations makes sense to me…in theory.
First let’s be honest and admit that the existing share insurance fund didn’t adequately shelter credit unions from the financial Tsunami. If we didn’t get a loan from the treasury Department to payback the debt of the failed corporates the industry would be an empty shell of itself.