PayThink

Bank stocks´ movement ahead of Thursday´s planned release of the Treasury Department´s stress tests results is giving new meaning to the familiar adage, "buy on the rumor; sell on the news." The financial press this week plunged full force into its speculation on which banks "passed" the government´s test and which did not. Despite the variety of guesses they´ve made, news outlets have been able to agree on a few likely tidbits, such as Citigroup´s apparent need for billions of dollars in additional capital. But Citi´s stock is up for the second day in a row. Why?

Since late last year, state and federal regulators have concluded in separate reports that current loan modification plans aren´t working, but it´s amazing how long they´ve taken to look for a reason why. As they bickered, however, private sector monitoring of loan mods accelerated.

The banking industry expressed grave fears over the mortgage cramdown legislation that failed in a Senate vote last week, but a post-mortem on the scene makes that anxiety seem a little overhyped. With so many different groups vying to kill the legislation, the vote last week was never a nail-biter.

They may have beat analyst expectations last week, but Visa Inc. and MasterCard Inc. aren´t quite in hog heaven.

First, there were rumors of planned leaks this weekend, then anticipation grew that the big news would come Monday or Tuesday, but now the truth is out: The stress tests "results," whatever they may "be," aren´t going to be released until Thursday. And not until after the market closes, at that. For the better part of the week, bankers and other market participants will have to distract themselves from the anxiety of the wait with the antics on Capitol Hill. The House is planning to vote on Rep. Barney Frank´s mortgage reform and predatory lending bill, while the Senate hopes to vote on Sen. Chris Dodd´s legislation increasing the FDIC´s borrowing authority. Dodd also wants to bring his card bill to the Senate floor.

Editor's Note: Credit Union Retired Executives (CURE), a resource for free, confidential management advice, is offering Credit Union Journal readers a glimpse into its files for CU Journal's new "Advice from the Brain Trust" feature. CURE will select from among its user questions and publish the advice that was offered in response. CURE responses are put together by the group's think tank of retired credit union leaders.

President Obama wasn't able to make it to Credit Union Journal's Grow Show last week, but he would have approved of the "Yes We Can" mindset of the credit unions in attendance.

As technology shifts, more and more consumers are utilizing the Internet for financial services. That can be good for credit unions, but it also brings with it risks if not handled right at a time when one result of the economic downturn is consumers are re-examining every business relationship and demanding to see value.

It would be darned easy, almost expected, to let the power of leading a super-carrier simply become your management style. And yet one veteran military leader said he has learned giving orders is not the most effective way to lead.

On Feb. 5, 2009, I was privileged to participate in a planning meeting with one of the most progressive credit unions in the country. They are coming off a break-even year in 2008, and — as with the industry as a whole — they are now faced with the unexpected, and unprecedented, burden of the NCUA assessment.