How Many Pinnochio’s for this Whopper?
She’s done it again. Much like her recent statements to a Senate sub-committee, Chairman Matz has played fast and loose with the truth in her recent statement on the 2016 Overhead Transfer Rate. She’ll do and say anything to try to substantiate the rising rate of the OTR, including her argument with Board Member McWatters about the legality of using a CPA firm to validate that which can only be done by a legal firm. She should have already learned the futility, frustration and embarrassment of that strategy.
As I read her statement from November 19, 2015, I puzzled over what she said concerning the 2011 PricewaterhouseCoopers OTR study. In her fifth paragraph, she stated: “The independent accounting firm objectively evaluated NCUA’s cost-accounting process, and found the OTR methodology is equitable and neutral with respect to charter choice.” A true statement from my review of the 2011 PwC study, but she then went on: “PwC also validated which NCUA regulations are insurance-related, and therefore counted toward the Overhead Transfer Rate, and which regulations are not.” In fact, the full, un-redacted version of the 2011 PwC study states something quite different than validation.
“Based on PwC’s review, the OTR Methodology was considered lacking in terms of the extent to which the classification of NCUA’s activities between insurance and regulatory (upon which the methodology is fundamentally dependent) represents a consensual view on such classifications in the industry. Further, there was found to be dissatisfaction within the industry with respect to NCUA’s efforts to communicate and explain the OTR Methodology in adequate detail.”
Does she really think that’s a validation of the methodology? And she has the nerve to accuse McWatters of being misinformed and spreading untruths about the agency!
The truth be told, I’m sure that the Chairman’s explanation for the inaccuracy of her statement was that upon the advice of general counsel she has only read the redacted version of the 2011 PwC OTR Review, which did not include any of the above mentioned conclusions and recommendations.