PayThink

If you place a frog in a kettle filled with water that is cool and pleasant, and then you gradually heat the kettle until it starts boiling, the frog will not become aware of the threat until it is too late. The frog's survival instincts are geared toward detecting sudden, not gradual changes.

Last] week, Credit Union Journal called attention to the important issue of resolving whether or not credit unions should be allowed to raise alternative capital ("Bid on Supplementary Capital Moves Forward," Sept. 28). The prohibition against alternative capital was put in place as part of the CU Membership Access Act of 1998 (CUMAA); and, currently, as the Journal rightly points out, only credit unions designated "low income" may raise it. I'm hopeful that the industry will work together to get the law changed so credit unions can issue member capital.

The book The Art of War is attributed to Sun Tzu, born during the Spring and Autumn Period of China (722-481 BC), a time of constant war in China. He became a heroic general for the king of Wu. The book presents a philosophy of war for managing conflicts and winning battles. It is accepted as a masterpiece on strategy and often referenced by generals and theorists throughout history.

Call me naive or even ignorant but I fail to see how alternative capital, as currently proposed by NAFCU, and supported by CUNA, strengthens our industry. To me it seems to perpetuate the current capital shuffling from natural person credit union to corporate CU to US Central. When a true crisis occurs, the burden is shuffled down to the natural person credit union that didn't create the crisis and are damaged irreparably.

During these troubled times, we're all for new business models that look to the future and stimulate growth. Our aging membership is of particular concern here on the homefront, as is our competitive marketing and branding efforts. And there is an endless stream of webinars, email and mail bombarding us that talks about changing our ways, at least at the individual credit union level. Nothing wrong with that so long as someone is taking the long view, marshalling forces, and leading the band.

Be honest: how many of you correctly handicapped the outcome of the member vote in Maine on converting to a mutual savings bank and then merging with a local bank?

Thanks to provisions in Tarp and the stimulus package, one man—the pay czar—gets a say on what bankers at firms receiving government aid get paid. But who is this pay czar? A moral grandstander like Eliot Spitzer? An Obama insider? As it turns out, Kenneth Feinberg is neither of those things.

Gary Gensler, the chairman of the Commodity Futures Trading Commission, is trying hard to convince Congress not to leave too wide a loophole in derivatives regulation, and his performance yesterday was itself a point towards his argument.

JPMorgan Chase’s Heidi Miller has made it clear that, when it comes to bankers’ pay, she won’t accept Congress’ populist pandering anymore. Miller, who is the chief executive of JPMorgan’s Treasury and securities services division, told attendees of U.S. Banker’s 25 Most Powerful Women in Banking dinner last night of an encounter she had with an unnamed member of Congress that left her “shocked” and “deeply depressed.”

While TD Bank’s “once-a-decade” systems failure last week might have a serious impact on its reputation for convenience and reliability, it also offered an unusual customer-service opportunity: managing a crisis almost exclusively through Twitter.