PayThink

What if Credit Union Journal just didn't report some of the "bad" news? The corporate stuff. The NCUA proposals. The branch closures. Would you as a reader and CU decision-maker be better off if you just didn't "know?"

Washington will hear from all of its financial services darlings one way or another this week. Conferences will bring together powerful Hill voices and cabinet officials. Meanwhile, the bankruptcy bill the House of Representatives passed this week will begin to brew in the Senate. There´s no vote scheduled on it, but the unofficial goal is to get it done in the next two weeks. Also watch for movement on new legislation introduced by Sen. Chris Dodd, D-Conn., and Sen. Mike Crapo, R-Idaho, that would increase the amount of money the Federal Deposit Insurance Corp. could borrow from the Treasury Department.

Warren Buffett came up with some bailout terms for Goldman Sachs to which folks at the Treasury Department should have paid closer attention. As the Financial Times reports today, top Goldman executives are prohibited by the Buffett deal from selling their company shares until October, 2011, or until all of Buffett´s preferred shares have been bought back. This poses a problem for Jon Winkleried, one of Goldman´s two co-presidents, who is leaving the bank at the end of the month. Winkleried will be stuck with his Goldman shares until the bank has enough money to buy out Buffett.

Other bankers may be miserable about the way the bailout is going, but Morgan Stanley analysts gave Washington the thumbs up yesterday in a note they wrote about their field trip down to the swamp.

Testimony to the Senate Banking Committee yesterday included a revelation about the Federal Reserve´s contribution to the mortgage crisis that, while it isn´t new, raises the possibility that not every mistake the venerated agency made has yet come to light.

Warren Buffett´s annual letter to shareholders Saturday was grim all around, but one passage in particular highlighted the depths of denial into which some mortgage lenders had to retreat in order to participate in the housing boom: A miniature version of the housing crisis occurred just a few years before the real one began.

Clearly, the two men leading the government´s efforts to stabilize the financial sector are eager to quash rumors that they aren´t working hand-in-glove.

It will be another busy week, with some coveted details expected from the Treasury Department and plenty of bankruptcy drama to go around. The House of Representatives intends to vote on the bankruptcy bill sometime this week, but no precise schedule has emerged yet. A conference on Monday should provide a wealth of ideas to digest over the following days. Also watch for Treasury's guidance on the implementation of the executive compensation rules in the stimulus package.

As the president of the 11th largest credit union in the country, I have followed, with considerable interest, the financial performance of U.S. Central, the corporates and the recent actions of NCUA.

When the notorious bank robber Willie Sutton was asked why he robbed banks he replied "...because that's where the money is." While one would have hoped for a higher standard from the NCUA, the nation's credit union chief regulator, when asked why they were pillaging the capital accounts of thousands of natural person credit unions to support a few, badly managed corporate credit unions, the NCUA response was tantamount to "because that's where the capital is."