(Washington league CEO) John Annaloro is right (
The other problem with the insurance fund is that we have the regulator and the insurance fund as one entity. NCUA has failed to exercise prompt corrective action, because it is in NCUA's best interest to hide failures and to get rid of problems through mergers. The NCUA Inspector General has repeatedly cited NCUA for contributing to credit union failures through bad examination procedures. Granted, the main cause of failures is bad management, but forbearance and lack of prompt corrective action increases the cost of failures and the frequency of failures. NCUA has no incentive to be transparent about the costs of failures because that too is a sign of failure. FDIC is transparent and is prompt with corrective action because FDIC is independent of the regulator.
John Annaloro is right and the rest of the trades should support major changes to the insurance fund. We need a premium-based insurance fund and we need an independent insurance fund. We also need more changes in the NCUA examination and oversight function.
Henry Wirz, CEO
SAFE Credit Union, North Highlands, Calif.