BankThink

This will be the Senate’s last week in session before the August recess; the House has already wrapped up its proceedings. Lawmakers will be ending an ambitious push on regulatory restructuring (not to mention healthcare reform) with less than they expected to accomplish, and that means summer homework. They’ll have plenty to chew on during the break. For one thing, the Treasury Department is insisting it will finally release legislative language on regulating derivatives this week so that members of Congress can review it over recess. There’s no set date and time for the announcement. Other activity on the Hill this week won’t be quite what was in July, but the halls of Congress won’t be completely silent yet.

It’s a pretty dense document, but it holds some important implications: Two economists have released findings showing a connection between better stock price performance during the financial crisis and higher capital requirements for banks. But the question remains: What measure of capital should reign supreme: Tier 1 or tangible common equity? The study’s method and results produce a quandary.

Last week there was a healthy reminder that if you want to know the shape your house is in, it can be a good idea to get out and take a look at it from down the street. You may need a coat of paint, after all.

I have read letters from Mr. Dennis Fisher (here and here) expressing relief that credit unions were not able to access TARP funds, much to the dismay of Dan Mica, CUNA, the CUNA Board, and the CUNA Governmental Affairs Committee (Marshall Boutwell, member) and I am sure other credit unions. I have read the letter from Mr. Marshall Boutwell, attacking Mr. Fisher and praising the work of Dan Mica in CUNA's efforts to place credit unions at an even greater risk by accepting "tax payer" funds.

I am writing to correct several inaccuracies in Credit Union Journal's coverage of the NCUA Board action July 20 regarding share insurance calculations and assessments.

This is to correct erroneous articles that appear in the July 23, 2009 online edition and the July 27, 2009 online and print editions of the Credit Union Journal. All three articles incorrectly assert that former WesCorp CEO Robert Siravo received a $6-million payout after NCUA placed WesCorp into conservatorship.

"No Money, No Campaign-ey" is Publisher Frank Diekmann's way of expressing why CUNA CEO Dan Mica says there will be no national CU branding campaign. I doubt such a campaign could ever work. Effective brands are based on being different from competitors in a way that is motivating to the prospect. To a prospect, credit unions, on average, are little different from banks, on average. "On average" is important because a national campaign must be based on a point of difference that most credits can prove. That generally brings us to "member owned." Unfortunately that doesn't appear to be a big deal to prospects. If it meant a lot to them, credit unions would already have a much larger share of the financial services market.

It was a comparison that seemed at first too histrionic to enjoy much of a shelf life: Rolling Stone reporter Matt Taibbi called Goldman Sachs a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Funny, but not necessarily something to float in the mainstream financial media.

Things will start to wind down in Washington this week as lawmakers prepare for their summer vacations. Overly ambitious hearing plans have already been scaled back. But things aren´t over quite yet. Look for a flurry of activity coming out of the Treasury Department. Legislative language on a revamp of derivatives rules should be released, though the Treasury has not given a firm date and time. It will be the last piece of the Obama administration´s regulatory restructuring plan.

This is the second panel of a House Financial Services hearing on bank regulators' views on the Obama administration's regulatory restructuring proposal. Treasury Secretary Timothy Geithner was alone on the first witness panel; he defended the plan. The bank regulators are expected to push back against the consumer protection regulators and, in some cases, the elimination of the thrift charter.