The FDIC Has an Epiphany – Moves to a KISS Approach for Using Only a “Simple Leverage Ratio”

Credit unions knew this all along

I have been trying to write a witty blog on this all morning. I wrote a few thousand words focusing on “I told you RBC was a bad idea.” Then I switched to “how much money have we wasted debating RBC and do examiners feel bad now that the banks are seeing the light” and have recently scooped them by giving regulatory relief first. Then I moved over to studying all of Chip’s comments on the fact that world regulatory leaders understand that liquidity save organizations in tough times, not goofy long-winded complex models for capital (wow, forgot how much that guy can confuse issues with the facts). Finally I just gave up on being right and the glories in rubbing the NCUA’s nose in the investment they made in RBC, and decided to write you a more direct piece: a call to action.

In the blog yesterday, Vic Pantea sent a call to action to the NCUA Board of Directors and gives them the CYA they so badly always need. You can simply follow the lead of other smarter agencies and take the credit for the right decisions. But what should you and I do?

Simple: Add our voice to the cry for the NCUA to come to its senses NOW. To rally the support of your lobbyist, trade organizations, and peers to amplify the call by simply communicating our hopes over and over. Push everyone to advertise a CU WIN: the FDIC adopts a proven CU model for evaluating capital adequacy. To call out that in the end, the FORMER FDIC Vice Chair (Koenig) was right: RBC is a burden, not a safety and soundness improvement. While BASEL might demand a way for large international banks to communicate with a common language, RBC is not what anyone needs in the community banking or credit union industries. It’s a loser and CUs want it gone, and wiped from the NCUA’s game plans.

Oh by the way, CECL is no better. So put a P.s. in every message you write and let’s refocus the agendas for the NCUA in 2020, right now! Help the NCUA tell the FASB people that approaches that need 10 years and constantly moving deadlines, are generally dead on arrival. Here is to the KISS (Keep It Simple Stupid) movement moving through the NCUA team like a wildfire. What a glorious vision after all.

Tell Me Why I’m Wrong.