Yesterday, Chip Filson published a piece concerning the NCUA’s actions in dealing with NYC credit unions that dealt in taxi medallion loans. In attempting to cram in an expensive and short-term solution, the NCUA and its board have given up on cooperative solutions despite many interested parties seeking to do just that.
As Chip mentions: “Members of Congress, the New York City Council, the union representing the taxi drivers, CUNA and three credit union leagues have all written or spoken up asking NCUA to do what is in the borrowers’ best interests. They have all sought a collaborative solution with the borrowers, not an outright sale of the portfolio.”
Here’s how I see it:
The NCUA is in a corner
Over the last few years the marketplace has come to expect them to be self-serving and quick to wash their hands of their responsibility to our members, our industry, and our economy by simply shipping the work-outs of challenged members to anyone but the credit union industry. Their propensity to allow third parties to bank big profits on these situations and take a hero’s bow for their quick actions is now becoming an act we have all seen too many times. Their lack of good faith as fosters of credit union members — as to the returns from members’ hard work — has led to a loss of goodwill between our system and the member who act as consumer-owners for the future. Yes the NCUA is in a corner, but do they care?
The NCUA board is silent and sulking in the shadows of that corner
Not sure of their role or their ability to lead the board once again pushes bureaucrats in front of the microphones to relay the NCUA’s position and approach to the problem. “Go ahead, deliver the news, but make it clear that the board is leading the charge. By the way, what is our position and why?” After years and years of workout tactics that follow the liquidate and transfer approach, the board has lost its will to debate new approaches on their watch. Short terms, political efficiencies, and no desire to be anything more than a “bureaucrat’s” friend has left the board in the shadows when these moments arrive.
The NCUA is putting us all in a corner
We are cooperatives and cooperatives live with members, not simply manage them as an investor would. Investors speed to liquidate, speed forward to the next best thing, and minimize losses like there is no consequence to the people who are washed away and robbed of a chance to work it out. And as the NCUA prepares to wash it all away again with the help of the investors’ “math and mystique”, we all lose. Not on paper, but in spirit. We lose the respect we have built by standing by those who want the chance to work it out, live it out. The NCUA is putting us all in a corner, sucking us into their vision of “burn to earn”, and in the end washing away generations of hope and respect over and over, one crisis at a time. And the view from the corner for the true of heart cooperatives sucks.
Is that how you see it? Tell Me Why I’m Wrong!