Author: Chip Filson

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Tomorrow’s NCUA Board Meeting-A Special Opportunity

There are two agenda item’s for Thursday’s meeting:  approval of the 2026/7 NCUA budget and a report on the financial status of the NCUSIF.

This will be the first board meeting since September 18.  Chairman Hauptman has implemented a practice of holding meetings only when needed versus. a fixed monthly event.

The Critical Decisions for the NCUSIF

This year end financial estimate for credit union’s unique cooperative fund is more than a financial update. In the past, this meeting has set the upper cap on the Normal Operating Level (NOL)which determines when the surplus from fund  earnings must be returned to credit unions as a dividend.

A dividend from NCUSIF operations has not been paid since 2008.  The dividend demonstrates  stable performance by the industry.  It also acknowledges credit union’s evergreen commitment to main 1% of insured shares as the principal earning asset for the fund. In contrast the FDIC relies primarily on open-ended premiums assessments for its revenue.

The Latest NCUSIF Financials

As of the October 2025 financials posted yesterday, the fund’s full year outlook is very positive after the first ten months.

Net income of $222 million is $10 million greater than the same period last year with operating expenses near the same level at $204 million.  The provision for future losses is funded to $240 million up  $10 million from a year earlier.

The fund’s yearend external audit is underway.   Assuming no surprises, it is straight forward to forecast the probable yearend outcome and the ratio of fund equity to insured shares.

This dynamic spread sheet model using actual data for the first ten months, estimates a yearend ratio of .3101 of retained earnings to insured shares.  The historical upper cap from 1984 initial implementation to 2017 in the NCUSIF was .30.   This cap was only raised in 2017 to accommodate temporarily an influx of funds from merging the TCCUSF surplus. This current projected earnings would result in a dividend of $200-$250 million with a30 NOL cap.

A Unique Leadership Opportunity

After the year end true-up of insured shares, the total ratio of 1.3% means the NCUSIF is fully funded.  In addition, there is more than $240 million in reserves, already expensed, to cover insured losses.

Chairman Hauptman is in a unique position to re-establish he NCUSIF’s historical cap of 1.3%.  Until the 2017 short term incease in the 1.3% cap, the  upper limit was unchagned even in the 2008/9  financial crisis, Dividends were a regular outcome in the first thirty years following the 1984 redesign.

The federal credit union act authorizes three board members.  As the lone member currently, Hauptman has a chance to restore the fund’s historical cap.  Sooner or later via court action or administration appointments, additional board members will be in place. It is now possible to reaffirm the original legal compact with credit union for supporting the 1% open-ended funding model in return for a stable upper NOL limit.

Restoring the 1.3% NOL cap authorizes  returning  credit union funds to credit members.  It demonstrate the administration’s intent tp limit the inherent tendency of government to always seek greater amounts of money to spend.

Most importantly it reinforces the unique cooperative model of the NCUSIF for credit union members and the public.  Credit union’s collective fund is different-by design.

Finally such action would implement Hauptman’s intention to return to the fund to its 1.3 NOL as stated in December 15, 2022 NCUA board discussion of this issue.  From his statement on the issue that meeting:

I appreciate the additional information on how the Normal Operating Level is calculated. We need more of this kind of transparency. In the spirit of more transparency, I ask that we acknowledge our responsibility to show why 1.30 is not adequate — as I said, every basis point over 1.30 is money credit unions could be investing in their members.  (link)

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Scenes of the Season II

A Messiah rehearsal with the New Dominion Chorale. Tom Beveridge, the Music Director-Conductor  for 35 years, prepares his final concert.

Holiday gift collection at St. Luke Catholic Church (VA)

Responses after Sunday’s three masses

As at the first Christmas; political activity at the DC holiday market.

The Advent candles with  a canned food drive at Arlington Presbyterian Church (VA)

Why Christmas matters still

 

 

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Live Video of the Largest Credt Union Conference

In my December 9th post I included a preview from NCUA’s Video Network of the largest credit union conference ever held to that point in time.

That short 20 minute overview gave NCUA staff’s instructions for the meeting plus an introduction to the content for examiners and credit union attendees.

After the event was over,  video highlights were edited and shared in NCUA’s Edition 18:  The December 1984 National Examiners Conference in Las Vegas. 

The 55 minute of outtakes focuses on three topics: common bond, the role of the regulator and the future of credit unions. Speakers include  state regulators, CU CEOs, NCUA staff and other federal supervisors such as  Richard Breeden, Martha Seeger, Ricard Pratt. NCUA Chair Ed Callahan provides opening and closing remarks, plus comments on what makes credit union’s truly unique. 

The conference is also covered in depth in NCUA’s 1984 Annual Report.  However the video captures the events live  including reactions from among the 3,000 attendees.

Why This Event Is Relevant Today

Although this special gathering concluded 41 years ago, the event still speaks to credit unions today in that:

* It demonstrates the multiple participants within the movement working  in shared purpose.
* Speakers showcase  leaders of the coop system– regulators, credit union professionals and experts in financial services.
* Critical issues in this era overlap those today: mergers, taxation, competition, innovation and the fundamental  advantage of cooperative design.

History Matters

From the truism “there is nothing new under the sun, to history never repeats, but does rhyme” there are multiple ways to learn from past events.

This video shows cooperative leaders in their most articulate and thoughtful approaches to the future. NCUA’s conference agenda of over 300 sessions of breakouts and general panels captured the movement’s advantage of sharing expertise and experience for everyone’s benefit.

Comments were sometimes controversial and often in disagreement, for example the need for a common bond.  Or, “Trust in a financial institution is like virginity; once you lose it, it’s hard to get back.”

The conference was also a celebration.  Just two months earlier  the NCUA board approved regulations implementing a completly different approach to the NCUSIF’s financial structure.  Instead of copying the other federal insuers annual premium approach, the new design used  cooperative experience to create a new m;odel built centered upon  an “evergreen” 1% deposit.
Most critically it showed how a credit union regulator and the movement can work together for enhancing the future for tens of million member-owners.

What  Attendees Remember Today

Clifford Rosenthal: A personal memory of the big conference in Las Vegas. It was a big deal for me; I was new to my role serving as head of the National Federation. I still have the little lucite piece that was given to attendees.

Paul Horgan: (credit union  CEO) Two recollections: NCUA and the Vegas meeting.

The meeting was innovation at its best.  Communication was the key feature.  Goodness, that was 41 years ago.

On Ed Callahan: Don’t remember the exact month and year but recall having the privilege of driving Ed from the Brainerd, MN airport to the league meeting…on the long drive I criticized the capitalization plan, he really listen then replied “Okay tell me your better idea.”  

I guess today’s takeaway is “enjoy your friends before it’s too late.”

Mark Wolff (former NCUA  employee):

Thank you for your post about the National Examiners Conference and for sharing the promotional video. Wow, watching it (and me in it!) was like going back in a time machine!

Being in the NCUA public affairs office at the time, I remember the sustained promotional effort to generate awareness and attendance. Along with the video I seem to recall regularly highlighting the conference in our newsletters and press releases  that NCUA sent to credit unions at the time and in board members’ speeches to CU groups.

During the conference I remember being struck by how many people had attended and how crowded the hallways were between breakout sessions. At the time I’d never seen anything like it. We all had a nice feeling of accomplishment afterward.

The CODA

Three months later at the 1985 CUNA GAC conference, Chairman Callahan announced that he, Bucky and I would leave the agency.  His term as Chair still had two and one half years remaining.  His explanation was, “We’ve done what we came here to accomplish.”
He said his future goal was to work with credit unions to develop the opportunities presented by deregulation.  One of those outcomes was the founding of Callahan & Associates.
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Scenes of this Season

An early snow with temperatures below average.

The weather didn’t hinder this Santa’s journey.

National Gallery of Art reception decorated with music and nature.

Statue of Mercury at the Gallery fountain.

The beauty of poinsettias and red berry.

 

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Two Examples of People Fighting for Democracy

Events in Ukraine move in and out of the American news cycle, and our attention, depending on multiple other daily events.

But for Ukrainians total war is a constant reality that affects all aspects of life.  The country is in a fight for its existence.  Life and death decisions are faced daily for everyone.

In a fight between an authoritarian dictator in Russia and a country’s whose people want self-determinatin, the outcome will depend on people’s morale, not just who has more weapons or manpower.

How does one learn about this critical factor?  What is Ukraine’s morale, its peoples’ confidence in the increasingly difficult political,  military and everyday  uncertainties all endure?

Two recent posts suggest the resilience of the Ukrainian nation is everywhere.

The first is a brief FaceBook post  from a Christmas concert which celebrates the country’s  music, culture and faith in the midst of war.

The concert did not go as planned. A Russian attack on the power grid shut down electricity  in the middle of the event.

The short Facebook video below shows what happened next. The Ukrainian words state: “There was a power outage right in the middle of the concert, but the choir didn’t skip a beat and kept on going in the dark.”

In this one minute excerpt note the orchestra and chorus continue to play. But not entirely in the dark.  Because  the audience raises  their mobile phone lights to make the concert hall still visible.

People uniting to bring light when darkness threatens.

(https://www.facebook.com/reel/1152383956497057)

On The Ground Video from Donbas

Caolin Robertson was a London-based investigative journalist who moved full time to Ukraine to cover the conflict .  He explaines his reasons in this brief video, Why I  Moved to Ukraine. . . for Good.

(https://www.youtube.com/watch?v=Ja6EzWrfg-w)

As mainstream foreign media coverage is at best intermittent  and often prompted by external actors-Russia, the US and Europe-Caolin chose to be on the ground full time.

His latest video is one of the best reports on the current state of the war as seen by soldiers and civilians living at the center of the conflict in Donbas.

Filmed last summer it includes live interviews with middle age soldiers in bunkers who have been in combat for almost four years.  Young couples and older residents are forced to leave their homes.  The  destruction of cities and towns is total.

The production is superb, the story is current and intermingled with  video of what these Ukrainian towns looked like prior to the 2022 Russian invasion.

One of the themes  in his interviews is the deep, storied and unique history of the Donbas, This is the area that Russia wants kiev to hand over as a condition of any ceasefire.  And one part in the Trump administration’s so called peace plan.

His interviews weave current events with history which makes this sory even more meaningful and tragic.

While 44 minutes might seem long, I believe it will keep your attention once you start.  For it shows people willing to persevere and fight no matter what the current cost in life and fortune.

Fpr a future of freedom there is a deep and profound price today.  A message the world should know and support whenever freedom anywhere is threatened.

(https://www.youtube.com/watch?v=Jq2RTlhvqbc)

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‘Tis the Season for Sharing Success with Members

To demonstrate the cooperative difference, some credit unions plan sending bonus dividend and loan interest refunds to members at year end.

Yesterday I read in one CEO’s staff update that  they were doing well enough to have accrued a minimum of $10 million in special distributions for savers and borrowers.

Here is an example of an announcment in which Robbins Financial CU is sending  members $20 million.  The special rebate program is to reward members’ loyalty and to demonstrate the credit union’s financial strength.

However credit unions are not the only financial firms which provide “members” with refunds, rebates or special dividends.  The following are excerpts from a large mutual, insurance and investment firm which competes directly with credit unions.

USAA Members Benefit from ~$3.7 Billion in Financial Rewards in 2025

Record Amount Underscores Association’s Commitment to Military Families

San Antonio, TX – USAA members are receiving approximately $3.7 billion in financial rewards in 2025 — the largest amount returned to members in USAA’s 103-year history. . .

The announcement follows USAA’s initiative to provide its members with nearly $450 million in zero-interest loans, payment extensions and fee waivers during the recent government shutdown.

In November, the Association also launched Honor Through Action, a five-year, $500 million initiative to support military family resiliency by bringing together public, private, and nonprofit partners to drive systemic change around three key pillars: meaningful careers, financial security, and overall well-being.

“We are committed to putting our members at the center of all we do and every decision we make,” said Juan C. Andrade, President and CEO of USAA. “Sharing our financial results with our members reflects our responsibility to deliver strong value and exceptional service for the military community. We are taking action every day to help keep costs down and protect the long-term value of membership. . .”

This record amount in financial rewards is possible because of USAA’s financial discipline, . .It is also a result of proactive steps USAA and members have taken to prevent losses.

“Ensuring our members benefit from our financial strength is critical.” Andrade added. “We will continue to push for reforms that address the broader factors increasing insurance costs for consumers.”. . .

USAA’s Impact in One State

The person who sent me thlis information added a calculation for his home state of North Carolina:

Why this matters for  North Carolina:  

Members in North Carolina will receive an average of $200, depending on their policies and location, as a bill credit or money back based on the member’s preference.   

Good ideas do not take long to replicate.  Especially when customers are treated as members.

Do credit unions really need to retain an average of over 11.0% retained earnings when the well-capitalized goal is 7%?

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December 9, 1984 – A Grand Credit Union Opening Day & An Early Departure

The largest credit union conference ever held to this point in time began gathering on Sunday, December 9, 1984 at the MGM Grand Hotel in Las Vegas.

One of the most amazing aspects was that the entire effort was organized and led by NCUA.   It was an event unique then, and still today, in credit unon history.

The conference had two phases.  In the first two and one half days over 800 state and federal examiners and regulators held meetings to share their learning and expertise.  On Wednesday afernoon they were joined by over 1,500 CEO’s/seniorexecutives, board members and leaders of multiple  league and trade organizations.

An NCUA Led Effort

Two months prior in October, NCUA released a Video Network Edition XI for state and federal examiners  to describe conference logistics: timing, travel arrangments, financial reimbusements and per diem.  And most importantly, a preview of the speakers and conference agenda.

The National Examiners Conference preparation video is 20 minutes and can be viewed here or in the link below. The eight speakers are all NCUA DC staff members responsible for specific areas of the conference.

The details may seem pedestrian by today’s conference attendee.  The room rates were only $35  per night for single or double.   These critical instructions show NCUA staff at its hard working best.

The Agency’s Washington team organized a national industry wide meeting led by only existing personnel.  At the time the Agency employed approximately 600 people.  This special event was in addition to the entire staff’s  day jobs.

According to the NCUA’ 1984 Annual Report  there were 10,547 active federal charthers and 4,657 insured state charters, plus another 1,500 whose share insurance was from a state authorized cooperative fund.  Moreover, all FCU’s were being examined annually, a process implemented in 1982.

The Agenda

Following six short briefs on conference logistics, at minute 14.21 a presentation of the “most important part of any conference” begins.  Joan Pinkerton, NCUA’s Public Information Officer, gives an overview of the conference speakers and over 50 breakout sessions.

Topics include: Is the Regulator Obsolete?, How the Early Warning System (EWS) Rating is Assigned, Recent Industry Scams et. al.  At minute 17 Mark Wolff describes  real case studies that will be discussed in joint examiner-attendee sessions.  The case details of up to 25 pages will be available to read in advance.

What Happened

The conference succeeded beyond all expectations.  It was both a learning and bonding event.  Next Monday I will publish Edition 18 of the NCUA’s Video Network, 55 minutes of live excerpts of the conference highlights.

Even today, some 41 years later, the event is still remembered as a special moment enabled by the collaborative character of the credit union system.

If you would like to share your memory, please send a short post to chipfilson@gmail.com.   I will include these along with the video and photos of the conference.

(https://youtu.be/Tw_JKnheoSk)

Another December 9, 1984 Event

On Saturday October 8 NCUA colleagues Bucky Sebastian and Mary Beth Doyle stopped by the house to drive me  to Dulles where we would fly to Vegas for the conference.

Mary Ann and I had been married for 17 years.  Our first date was my senior year in college at the Harvard-Princeton football game.  I had been expecting to go with her younger sister whose flight from Midland, MI was canceled due to snow  Mary Ann took her place.

We married 18 months later in a service at Merton College Chapel, Oxford, where I was a student and she worked in London for Dow Chemical’s UK office.

We traveled the world together, first courtesy of Uncle Sam who said I owed him some time.  Our first daughter, Lara, was born in Athens, GA while I was at Supply Corps School.  Our second, Alix, was born in Yokosuka, Japan where I served as Supply Officer on the USS Windham Cty (LST-1170) and later at the Supply Depot on shore duty.

After four plus years in the Navy, in December 1973 I joined the International Division of the First National Bank of Chicago expecting a two year rotational training period.  Six months later our family was in Sydney, Australia.  I was in the bank’s rep office and assisted with their wholly-owned finance company FCAL.  It was a time of critical economic turmoil, short term rates were over 20%.  They wanted help working through the crisis in FCAL’s loan portfolio.

After three years, we returned to Chicago.  I left the bank to work with Bucky Sebastian and Ed Callahan in the Illinois Department of Financial Institutions (DFI) where I was credit union supervisor.  Five years later we moved to Bethesda as the three of us  joined NCUA.

In these 17 years Mary Ann was critical to everything that life brings to a family.  She not only had the primary care roles with our two girls, but also worked a full time job where possible.

Her talents for  maintaining home life while I was traveling, expanding her interests in photography, design and working with her hands in the kitchen or the sewing room are habits both girls adopted.  She was disciplined, but in a very soft way, always sensitive to others’ needs.

I am grateful our two children inherited all the good she gave them which they express every day.

She had an adventurous streak as well.  Once we pulled into Hong Kong harbor on R&R. Mary Ann and several other wives flew from Japan to see us.  Our LST anchored in the harbor.  The city was still under British rule. The Navy purchasing office would first send out local supply boats  to refill our fresh water tanks and order fresh food supplies.

As I stood on the deck  waiting to give our purchase order to the local vendor, I saw the small harbor craft had an extra passenger.  Mary Ann didn’t wait for us to come ashore via the harbor’s water taxis. She came out, on her own, in the middle of the harbor to welcome the whole ship.  It was just plain joy as she came on deck. The Captain was a little uneasy with this protocol breach, but never said a thing.

In the picture below, Mary Ann with Lara and Alix are on on the beach in Hayama, Japan.  Fuji is faint in the distance. It is the fall of 1971.

Mary Ann’s mother had flown in to help while I spent the week at NCUA’s Examiner Conference. Early Sunday morning I got a call from her mother that Mary Ann had gone to the hospital that night and died.  Her five year fight with breast cancer was over.   I flew home that morning.  Our 17 year journey together was over.

Now go back to the 14th minute of the video above and see Joan Pinkerton.  For in 1987 we were married.  She knew Mary Ann and had even babysat our girls when we traveled together.  Life is full of possibilities even when some hopes end.  Joy can still be found.

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Animal Farm Becomes the Credit Union Jungle

From Aesop’s fables to the present day, writers have used animals to portray the failings of human society.

Animal Farm by George Orwell in 1945 used the  metaphor of animals living together in a farmyard to illustrate a political point.  HIs thesis is that power inevitably corrupts.

This inescapable temptation leads to the betrayal of democratic ideals and the re-establishment of totalitarian rule. An outcome enabled by a naive and accepting working class.

Orwell’s story is an allegory of the 1917 Russian Revolution and the rise of Stalinism.  Putting his dialogue in the mouths of animals was an inventive way to show how authoritarians manipulate language to justify their ends.

Ten years ago a credit union observer/CEO used this political satire to describe  deeply troubling trends in the coperatie system.

The blog’s title: Down on the Farm.(Be sure to click read more for the writer’s ending challenge, Who Let the Pigs In?)

An Updated Animal Story–On Film

In these prior stories the pigs are the bad guys.  The credit union commentator and Orwell hoped their literary skills would motivate readers to address  threats both foresaw to democratic societies.

But human nature doesn’t always respond to  danger until it arrives on their doorsteps.

Today’s retelling is not on the farm, but in the jungle. Here the wild animals have no fences or guardrails. They can only be viewed at a safe distance by safari tours.  It is nature in its most natural state.

In this film metaphor, those who feast on other living kindred are the lions.  Their prey are large herds of water buffaloes living on grass plains, at peace with their kin. They do not kill to live.  The game wardens and tourists who witnessed these scenes are observers or, in this parable, clear stand ins for regulators and the public.

The Attack

Part one is just over four minutes. The stealth approach, the pack attacks and captures a small defenseless youngster.  The helpless calf is thrown into a river, where two crocodiles decide the prey should be theirs, not this land bound pride’s.

The action is quick. The situation dire.  The calf’s fate seems sealed.  All the onlookers agree this is a hopeless situation.  Another successful kill.  Moral outrage, anger and even sympathy provide no recourse. This is the law of the jungle in full view.

(https://youtu.be/WXJmvlIckfI)

The Outcome

The calve’s life is over.   The lions lay down to savor their feast.  No help can come now.  It is far too late and certainly life-dangerous to interfere. The end has come. . . or has it?

Here is part two.  Also just four minues.

(https://youtu.be/u1Rt17QglXY)

The adults in the herd, those who cared about their offspring and know the ways of the jungle acted-on the spot

After initially running away, they regrouped, collectively, and attacked. They first circle and then  go after the  herd’s predators one at a time. Angry bulls leading the charge.  They then  cleared the killing field of any stragglers.

The onlookers are amazed.   Even the safari wardens say they have only seen this on film. While unusual the response is not unknown.  It’s instinctive when one’s entire future is at stake.

The Moral or Just an Animal Act?

The response of the water buffalo herd, is what Orwell and Jim Blaine hoped to arouse with their Animal Farm prose imagery.

In this film allegory, these animals understand  how to deal with their stronger predatory jungle inhabitants. If they can work to protect each other, it would seem credit union leaders should be able to turn back their avaricious members feasting on their coop peers via mergers.

In most credit unions, mergers are a matter of life and death of the organization.   If you don’t think so, just ask any of the 41 credit union leaders merged in the third quarter of 2025.  Oh, you can’t because they are now under someone else’s control.

It’s time for the cooperative herd to act.  If not, only the pigs and lions will be the future of the movement.

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Buffet’s 2025 Thanksgiving Letter

This annual secular homily is Buffett’s last as CEO.  It is eight pages filled with reminisces, friendships and observations.   At 95, his perspective of life’s lessons has universal relevance.

I have added the subheads and boldings to the excerpts below.

A Story about a CEO’s Mistake

In 1985, when Don was president of Coke, the company launched its ill-fated New Coke. Don made a famous speech in which he apologized to the public and reinstated “Old” Coke. This change of heart took place after Don explained that Coke incoming mail addressed to “Supreme Idiot” was promptly delivered to his desk. His “withdrawal” speech is a classic and can be viewed on YouTube. He cheerfully acknowledged that, in truth, the Coca-Cola product belonged to the public and not to the company. Sales subsequently soared.

The Joy of  Omaha as Home

Can it be that there is some magic ingredient in Omaha’s water?

I lived a few teenage years in Washington, DC (when my dad was in Congress) and in 1954 I took what I thought would be a permanent job in Manhattan. There I was treated wonderfully by Ben Graham and Jerry Newman and made many life-long friends. New York had unique assets – and still does.

Nevertheless, in 1956, after only 1½ years, I returned to Omaha, never to wander again. Subsequently, my three children, as well as several grandchildren, were raised in Omaha. My children always attended public schools (graduating from the same high school that educated my dad (class of 1921), my first wife, Susie (class of 1950) as well as Charlie, Stan Lipsey, Irv and Ron Blumkin, who were key to growing Nebraska Furniture Mart, and Jack Ringwalt (class of 1923), who founded National Indemnity and sold it to Berkshire in 1967 where it became the base upon which our huge P/C operation was constructed.

Our country has many great companies, great schools, great medical facilities and each definitely has its own special advantages along with talented people. But I feel very lucky to have had the good fortune to make many lifelong friends, to meet both of my wives, to receive a great start in education at public schools, to meet many interesting and friendly adult Omahans when I was very young, and to make a wide variety of friends in the Nebraska National Guard.

In short, Nebraska has been home. Looking back I feel that both Berkshire and I did better because of our base in Omaha than if I had resided anywhere else. The center of the United States was a very good place to be born, to raise a family, and to build a business. Through dumb luck, I drew a ridiculously long straw at birth. . .

Luck in Life

But Lady Luck is fickle and – no other term fits – wildly unfair. In many cases, our leaders and the rich have received far more than their share of luck – which, too often, the recipients prefer not to acknowledge. Dynastic inheritors have achieved lifetime financial independence the moment they emerged from the womb, while others have arrived, facing a hell-hole during their early life or, worse, disabling physical or mental infirmities that rob them of what I have taken for granted. In many heavily-populated parts of the world, I would likely have had a miserable life and my sisters would have had one even worse.

I was born in 1930 healthy, reasonably intelligent, white, male and in America. Wow! Thank you, Lady Luck. My sisters had equal intelligence and better personalities than I but faced a much different outlook. Lady Luck continued to drop by during much of my life, but she has better things to do than work with those in their 90s. Luck has its limits. . .

Father Time is Undefeated

Father Time, to the contrary, now finds me more interesting as I age. And he is undefeated; for him, everyone ends up on his score card as “wins.” When balance, sight, hearing and memory are all on a persistently downward slope, you know Father Time is in the neighborhood.. . .

The Lasting Influence of Mothers

Fortunately, all three children received a dominant dosage of their genes from their mother. As the decades have passed, I have also become a better model for their thinking and behavior. I will never, however, achieve parity with their mother . .

A Word for His Children

I have assured my children that they do not need to perform miracles nor fear failures or disappointments. These are inevitable, and I have made my share. They simply need to improve somewhat upon what generally is achieved by government activities and/or private philanthropy, recognizing these other methods of redistribution of wealth have shortcomings as well.. .

On CEO Salaries

During my lifetime, reformers sought to embarrass CEOs by requiring the disclosure of the compensation of the boss compared to what was being paid to the average employee. Proxy statements promptly ballooned to 100-plus pages compared to 20 or less earlier.

But the good intentions didn’t work; instead they backfired. Based on the majority of my observations – the CEO of company “A” looked at his competitor at company “B” and subtly conveyed to his board that he should be worth more. Of course, he also boosted the pay of directors and was careful who he placed on the compensation committee.

The new rules produced envy, not moderation. The ratcheting took on a life of its own. What often bothers very wealthy CEOs – they are human, after all – is that other CEOs are getting even richer. Envy and greed walk hand in hand. And what consultant ever recommended a serious cut in CEO compensation or board payments?

A Few Final Thoughts

Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to beat The Golden Rule as a guide to behavior.

J write this as one who has been thoughtless countless times and made many mistakes but also became very lucky in learning from some wonderful friends how to behave better (still a long way from perfect, however). Keep in mind that the cleaning lady is as much a human being as the Chairman. . .

I wish all who read this a very happy Thanksgiving. Yes, even the jerks; it’s never too late to change. Remember to thank America for maximizing your opportunities. But it is – inevitably – capricious and sometimes venal in distributing its rewards.

Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better.

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Government Protecting Us From… Government

by Will Rogers, Jr.

It takes a special kind of Washington brilliance for a regulator to decide the greatest threat to the republic is its own discretion and then propose a rule to rescue us from itself. But here we are.

The NCUA has unveiled a proposal that essentially says:  “We hereby forbid ourselves from misbehaving. We don’t trust ourselves either.”

In a normal world, regulators create guardrails for the people they regulate. Only in our nation’s capital does an agency build guardrails to keep itself from driving off the road.

The Rule’s Premise: Reputation Risk Isn’t Real

This proposal seems to assume that reputation risk is some imaginary creature—like Bigfoot, or a cheerful airline fee.

One wonders whether the drafters have heard of a quaint little story called Wells Fargo, where an institution spent years rebuilding trust after opening millions of fake accounts.  But perhaps NCUA thinks that was all just a marketing misunderstanding.

If the agency truly believes reputation risk is fictional, one hopes they never Google “NCUA failures” or, heaven forbid, read their own Inspector General reports.

Who Exactly Is Being Protected Here?

The proposed rule claims to stop NCUA from pressuring a credit union to decline accounts for certain businesses: liquor stores, cannabis operations, burlesque venues, adult-film producers, and so forth.

One might ask:  Has this ever happened? Even once? Anywhere?

No.
This is Washington’s favorite sport: solving imaginary problems so it can avoid the real ones.

Meanwhile, the real harm that does exist: merger-driven CEO enrichment, member disenfranchisement, sham elections, and sending member savings to buy bank shareholders’ at premiums, goes unaddressed because someone must ensure the men’s club dancers of America are free to open checking accounts. The republic is safe.

The Greatest Burden: Fixing What Isn’t Broken

Fixing real problems is difficult. Fixing imaginary ones is far easier, and far more wasteful.

Rules like this drain time, staff attention, and credibility. Worst of all, they distract the agency from the issues actually hurting members:

  • selling strong, local credit unions to distant ones,
  • conducting board elections with all the transparency of a papal conclave,
  • and using member capital to fund bank-acquisition premiums.

But at least NCUA has now protected the nation from the nonexistent threat of ideological debanking.

Reputation Risk: It Exists (Even if NCUA Pretends Otherwise)

Reputation isn’t a theoretical construct. It is the currency of leadership.
It evaporates when leaders substitute ideology for competence.
It collapses when institutions forget who they serve.
It disappears when regulators look the other way, or worse, when they look inward and pass rules to restrain what they themselves might do.

If NCUA doubts that reputation risk is real, a previous post about NCUA’s morally incompetent General Counsel and Chief Ethics Officer has already written the case study for them: A Culture of Impunity, a chapter the agency should revisit with a box of tissues handy.

The Real Absurdity

This proposal doesn’t make the agency strong. It makes it look frightened. afraid of its own staff, its own judgment, and its own shadow.   It solves a problem that does not exist, while ignoring several that are eating the system alive.

Proposing this in order to curry favor with ideological overseers does not enhance NCUA’s standing. It diminishes it. It invites laughter in all the wrong places.

A Modest Suggestion

If NCUA wants to improve its reputation, there is a simpler way than pretending reputation risk doesn’t exist: Let this rule die quietly.  Slip it into a drawer. Close the drawer. Lose the key.

As Will Rogers, senior advised: “Never miss a good chance to shut up.”