Are you passionate about credit unions? Do you feel strongly about where the community is moving? Credit Union Journal wants to hear from you — and now it's easier than ever to be heard.
At cujournal.com, you can do more than just read about the news — you can have your say about it, too. In addition to being able to submit letters to the editor for publication, you can leave comments on specific articles and spark a discussion and/or debate on the issues that mean the most to you.
CU Journal has always sought to be a forum for discussion of the issues that are important to credit unions, to facilitate a dialogue on the biggest trends, challenges and opportunities to face our readers. At left are some of your colleagues' latest comments.
Eight Reasons the Housing Recovery's Been So Slow
The credit scoring algorithms do not (and cannot) factor in a person's race. It's a predictive indicator of credit risk, so to say the riskiest borrowers are having trouble getting credit is like saying bad drivers are having a tough time getting cheap auto insurance.
The 2008 meltdown happened largely because loans were made at breakneck pace to people with insufficient income and/or poor credit. So now not doing that is slowing the recovery?
Posted by tony_h | Monday, July 14 2014 at 5:00PM ET
————————————————
NAFCU Study: CUs Are Dissatisfied With Exam Process
Credit unions need to understand that they do not have to agree with the DOR as initially presented or, for that matter, after discussions with the NCUA examiner to modify or remove the DOR are unsuccessful. For a further explanation of the possible give and take, please review:
Credit unions should be forewarned that if they cannot reach a satisfactory compromise, NCUA may take appropriate administrative action(s) to mandate compliance.
All too often, a credit union is unaware or ill equipped to defend its position so it agrees to a DOR that could have been modified or removed if the credit union were properly prepared with the knowledge and counsel to do so.
Posted by bisker | Tuesday, June 24 2014 at 12:56PM ET
————————————————
NCUA's Fazio Goes Into the Risk-Based Capital Lion's Den
No one at NCUA has explained why credit unions should have higher risk weights for the same assets than banks. The risk weights on mortgage loans, business loans and CUSO investments are all unreasonable. The NCUA has drawn the wrong lessons from dealing with past problems. The NCUA assumes that certain types of assets are bad. The true lesson should be that any asset can be bad if it is badly managed. The credit union failures caused by mortgage lending, business lending and investing in CUSOs were all the direct result of bad management. The risk was not in the asset type but rather the management of those assets. The Basel III risk weights are a good guidelines for how credit union risk weights should be set. NCUA has no basis for setting higher risk weights. The biggest risk that NCUA can address is to repair their examination process. The sudden failures of the corporates have been repeated in natural person credit unions. All of these failures were the result of long term faulty management. All have in common that the CAMEL ratings did not predict the failure. How does the failure rate of credit unions compare to those of financial institutions regulated by other regulators? Setting capital levels too high is as dangerous as setting them too low. Not fixing a broken examination system means at a minimum that whatever capital credit unions hold, it will be wasted by bad management.
Posted by henryw | Wednesday, July 02 2014 at 8:26PM ET
————————————————
Comment Period Complaints Dominate NCUA's First 'Listening Session'
"There's no rush," Matz told the more than 150 credit union representatives, NCUA employees and examiners who attended the session at the Westin Bonaventure Hotel. "We've been discussing this for more than two years. We've put together a group of credit unions -- who will remain anonymous -- to help with the second draft. We're not rushing into this at all."
Why are the credit unions "assisting" NCUA remaining anonymous????? We all should have access to these credit unions to weigh in when this is such an important issue. I understand that if the group is too large then nothing gets accomplished, but NCUA is being too sneaky about this. NCUA fails to realize we are in the business of "risk"....risk cannot be completely eliminated, yet, this is what they are trying to do to credit unions with their heavy-handed tactics.
Posted by samthesham | Friday, June 27 2014 at 10:09AM ET
————————————————
Lenders Can't Forget Past As New Car Sales Surge
It is not just the old habits we need to worry about. When your loan terms extend to 72 and 84 months you have many members with negative equity when they want to buy their next car. Many lenders are financing up to 130% of value (tax, license, warranty, GAP and the negative equity in the trade in). More and more members with long term loans have the same situation as with a lease. They don't have any equity in the car. When the next economic downturn hits, auto loan losses will likely balloon. Cars have gotten so expensive to buy, to maintain and to fuel. The auto industry better come up with new ways to lower the costs or many members will find they can't afford to own a car.
Posted by henryw | Monday, July 07 2014 at 11:58AM ET
————————————————
House Financial Services Panel Chair Delivers Letter, Deadline to NCUA
It is interesting to note in Chairman Matz response that the arbitrary determination of the NCUA examiner would require a rubber stamp all the way to the up the ladder to the NCUA Board. Somehow that does not give me a warm fuzzy feeling.
Posted by briang | Wednesday, July 09 2014 at 8:37AM ET
————————————————
Kinecta FCU Tests Small-Dollar Lending With New Underwriting Model
I would like to know if most of these Small-Dollar Loans are D&E Credit.
William D. Allen, Manager
Rochester & Monroe County FCU
williama@rocmon.org
460 North Goodman St. Rochester, NY 14609 585-546-8794
Posted by cu1234$ | Thursday, July 10 2014 at 8:33AM ET
————————————————
Comendable effort to live the CU philosophy of people helping people! It's awesome that you are saving them so much money, but I am curious to know what education effort you have in place to ensure that you actually break the cycle for the long term.
Eric Tapio
VP of Lending, Premier FCU
Posted by Eric T | Friday, July 11 2014 at 8:26AM ET
